Consumer complaint received 2020-06-17
Product: Mortgage — VA mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage — 
Company: Fairway Independent Mortgage Corporation (CA)

Consumer Financial Protection Bureau XXXX XXXX  XXXX XXXX, IA XXXX Date : XX/XX/XXXX Re : Violation of The Fair Housing Act, as amended in XX/XX/XXXXand RESPA Violation To whom it may concern : My name is XXXX XXXX XXXX My complaint begins with the mortgage referral activities of real estate broker XXXX XXXX XXXX ( " herein Ms. XXXX ), doing business as XXXX and XXXX, whose business address is XXXX XXXX XXXX , XXXX XXXX , CA. XXXX. RFJN Exhibit 1 Ms. XXXX at all times at the time of this incident was either employed or provided real estate broker services on behalf of XXXX XXXX  XXXX a developer whose business address is XXXX XXXX   XXXX XXXX, XXXX XXXX, CA. XXXX according to their Articles of Corporation, California XXXX Number XXXX. RFJN Exhibit 2 XX/XX/XXXX, XXXX XXXX XXXX, a XXXX Veteran found an ad for a home in the price range of {$490000.00},, for property address XXXX XXXX XXXX XXXX, XXXX  XXXX, XXXX XXXX, CA. XXXX and contacted the Sales Office to schedule an appointment in which to view the property. Ms. XXXX contacted XXXX XXXX XXXX and told him that " we will open the door for you at XXXX. RFJN Exhibit 3 XXXX XXXX XXXX and XXXX XXXX ( his wife ) expressed to the lady in the Sales Office of their interest in the property. The lady in the Sales Office handed XXXX XXXX XXXX a document that outlined what XXXX XXXX XXXX had to do in order to get his name on the builders priority list. The lady in the Sales Office told XXXX XXXX XXXX and his wife that they had to be pre-qualified through the builders preferred lender and that they would be allowed to use their own lender in which further evidence of this can be found on the builders website under financing whereas the question posed was " Do I have to use your preferred Lender? '' The answer was " However, you are not subject to use them. ( see RFJN 4B, last page ) The document that XXXX XXXX XXXX received from the XXXX  Sales Office was titled " '' Priority List & Pre-Qualification Process. '' In addition to that all of the information on the builders website reflects that all customers had to be prequalified by the builders preferred lender. RFJN Exhibit 4, A, B, and C. 
XXXX XXXX XXXX and XXXX XXXX immediately went home to began the prequalification process with the builders preferred lender. Submitted in my pre-qualification application was my Department of Veterans Affairs award letter that reflected that I was XXXX XXXX XXXX due to my service connected XXXX, Social Security benefits letter, my OPM Retirement, my wife 's two weeks of paystub and my XXXX Preapproved loan letter. 
After I had completed the online application I received an email from XXXX XXXX, ( NMLS # XXXX ), who is employed at Fairway Independent Mortgage Corporation, XXXX XXXX XXXX XXXX, XXXX XXXX, XXXX XXXX, CA. XXXX. The email thanked me for submitting my loan application. RFJN Exhibit 5 XXXX XXXX, ( NMLS # XXXX ), who is employed at Fairway Independent Mortgage Corporation, XXXX XXXX XXXX XXXX, XXXX XXXX, XXXX XXXX, CA. XXXX contacted XXXX XXXX XXXX via email and said " Congratulations on getting preapproved elsewhere. I am confident that well be able to do the same. I appreciate you sending everything our way so quickly. '' RFJN Exhibit 6 XXXX XXXX, ( NMLS # XXXX ), who is employed at Fairway Independent Mortgage Corporation, XXXX XXXX XXXX XXXX, XXXX XXXX, XXXX XXXX, CA. XXXX, sent XXXX XXXX XXXX an email in which stated " Hey XXXX, Yes, I need everything for a complete application file. This is not a prequalification, rather a preapproval. '' XXXX XXXX statement contradicts that of the builder whereas the builder only required that XXXX XXXX XXXX get prequalified through his preferred lender ( see RFJN Exhibit 4, A, B, and C ) and after which XXXX XXXX XXXX had the rights in which to use his own lender. XXXX XXXX even after being told by XXXX XXXX XXXX that he did not need a loan and that he only had to get prequalified through the builders preferred lender was adamant that XXXX XXXX XXXX be preapproved. RFJN Exhibit 7 XXXX XXXX then responded in an email and stated, " Please keep in mind I am the preferred lender for the builder. It is the builders decision on who they accept an offer from so I would recommend reaching out to the sales agent to see if they will accept your offer. '' This in my opinion is a blatant abuse of power. As the builders preferred Lender that does not grant XXXX XXXX the authority in which to change the terms of the builders requirement from prequalifying to preapproved without written authorization. RFJN Exhibit 8 XXXX XXXX XXXX then contacted the Sales Office to see if he would be allowed to move forward. Ms. XXXX, Broker and XXXX  Senior Sales Associate stated in her email, " Hi XXXX, I will need you to proceed with pre approval process with our preffered lender. I can not hold any deposit without pre approval from our lender. '' Ms. XXXX statement as the Senior Sales Associate is contradictory to that of the builders in which only required that I get prequalified ( see RFJN Exhibit ). RFJN Exhibit 9 XXXX XXXX XXXX reached out to XXXX XXXX to ask if he would provide the Sales Office with a preapproval so that he could move forward. XXXX XXXX told XXXX XXXX XXXX in an email, " No, I cant do that. For me to send a preapproval I have to be able to do the loan. With all the emails I am unable to take a look at the file and try to figure out if we are able to do it or not. '' This statement is contradictory to that of the builders requirements in which only required that XXXX XXXX XXXX be prequalified ( see RFJN Exhibit 4 ). RFJN Exhibit 10 XXXX XXXX, after putting XXXX XXXX XXXX through all of this finally admitted to XXXX XXXX XXXX, " However, we CAN NOT give you a 100 % loan with your foreclosure/deed in lieu. '' This statement is contradictory to that of XXXX XXXX who stated, " Congratulations on getting preapproved elsewhere. I am confident that well be able to do the same. '' ( see RFJN Exhibit 6 ). The elephant in the room here was at what point did he XXXX XXXX realize that he could not do the loan? Secondly, once XXXX XXXX reached that decision then why wasn't XXXX XXXX XXXX allowed to proceed with XXXX? and lastly, who granted XXXX XXXX, XXXX XXXX, XXXX XXXX, and XXXX XXXX the authority in which to circumvent the Builders prequalification requirements and turn it into a preapproval? RFJN Exhibit 11 XXXX XXXX, at XXXX had preapproved XXXX XXXX XXXX at {$570000.00} with 100 % financing with full knowledge of the fact that XXXX XXXX XXXX had a foreclosure/Deed in Lieu on his Certificate of Eligibility. Once XXXX XXXX, XXXX XXXX, XXXX XXXX, and XXXX XXXX realized that the builders preferred Lender could not meet the loan offered by XXXX XXXX, at XXXX, XXXX XXXX XXXX should have been allowed to move forward with purchasing a home and that did not happen here as the builders preferred Lender was adamant at trying to place XXXX XXXX XXXX in a loan in which he did not want. RFJN Exhibit 12 XXXX XXXX XXXX was Denied the rights in which to purchase a home at XXXX, as the home in which XXXX XXXX XXXX was attempting to purchase was sold from under him just as XXXX XXXX told XXXX XXXX XXXX that she would do, if he failed to get preapproved with the Builders preferred Lender. 
The Fair Housing Act The Fair Housing Act, as amended in XX/XX/XXXX, prohibits housing discrimination on the basis of race, color, religion, sex, disability, familial status, and national origin. Its coverage includes private housing, housing that receives Federal financial assistance, and State and local government housing. It is unlawful to discriminate in any aspect of selling or renting housing or to deny a dwelling to a buyer or renter because of the XXXX of that individual, an individual associated with the buyer or renter, or an individual who intends to live in the residence. Other covered activities include, for example, financing, zoning practices, new construction design, and advertising. 
Due to their actions I XXXX XXXX XXXX was denied a dwelling as I was not allowed the opportunity in which to move forward and procure housing for me and my family as I had been pre-approved with 100 % financing through XXXX, in which XXXX XXXX, of Fairway Independent Mortgage Corporation admitted that he could not get me 100 % financing. What is more disturbing is that the employees of Fairway Independent Mortgage Corporation continued to harass me for additional documentation with full knowledge knowing that they could not give me 100 % financing like XXXX could and waited three days before they told me. 
Even though it is a policy of the builders to have all of the potential homeowners go through the builders preferred lender, prior to allowing them to use their own lender it is not the LAW. Clearly XXXX XXXX, XXXX XXXX, XXXX XXXX, and XXXX XXXX XXXX knew that the Fair Housing Act allow for exceptions to that rule for people with XXXX because it is a part of their initial license requirement, and license renewal requirements as it states ; The Fair Housing Act requires owners of housing facilities to make reasonable exceptions in their policies and operations to afford people with XXXX equal housing opportunities. That did not happen here as I was never given the opportunity in which to move forward. In addition to that it was never a requirement of the builder that I get preapproved through the builders preferred Lender. 
I was never given this opportunity. In fact I was harassed by all of the parties involved to provide additional documentation for a loan in which Fairway Independent Mortgage Corporation could not do in which was to provide me with a 100 % loan. It took three days before the preferred lender admitted that he could not do 100 % financing and even when he did I was not allowed to move forward with procuring a home. 
The preferred lender was provided sufficient documentation in which to prequalify me and allow me the opportunity in which to procure a home. Instead I was denied and stripped of all of my rights as the preferred lender had full knowledge of the fact that Fairway Independent Mortgage Corporation could not do 100 % loan and withheld that information from me. 
As soon as Fairway realized that they could not give me 100 % financing, I should have been allowed to move forward and there should have not been any further requests for anymore documentation. I should not have to release my documentation just so that they could have them on record. In fact XXXX XXXX XXXX Broker/Senior Sales Associate should have intervened and allowed me to move forward as I was not required by law or the builders requirements to adhere to this in house policy. 
XXXX XXXX XXXX, the broker/Senior Sales Associate, who is responsible for providing customers that walk in with documentation knew that I had to be prequalified as opposed to preapproved as it is her duty to know that. However, Ms. XXXX elected to deny me of the rights in which to procure a home as I was subjected to adhere to a policy in which was not that of the builders as the builder only required that I be prequalified ( see RFJN Exhbit 4, A, B, and C ) according to the documentation in which I received from the " XXXX  Sales Office. '' Ms. XXXX or Respondent, as defined below, and has found the following law violations : Under certain lead agreements and desk license agreements with a mortgage lender, Ms. XXXX accepted payments from that mortgage lender in exchange for referrals in violation of the Real Estate Settlement Procedures Act, 12 U.S.C. 
2607, and its implementing regulation, Regulation X, 12 C.F.R. part 1024 ( collectively, RESPA ) ; and Ms. XXXX and agents required hundreds of consumers wishing to place an offer on one of the XXXX XXXX   XXXX  properties offered for sale to be preapproved with the Fairway Independent Mortgage Corporation mortgage lender, and received payments from the mortgage lender for the resulting referrals, in violation of RESPA. 

This in violation of the Consumer Financial Protection Act of 2010 ( CFPA ), 12 U.S.C. 5563, 5565.

I Jurisdiction 1. The Bureau has jurisdiction over this matter under sections 1053 and 1055 of the CFPA, 12 U.S.C. 5563 and 5565, and RESPA Section 8, 12 U.S.C. 2607 ( d ) ( 4 ).

Jurisdictional Findings and Conclusions 2. Ms. XXXX is a real estate broker based in California. Its principal office is located at XXXX XXXX XXXX, XXXX XXXX, CA. XXXX XXXX. Ms. XXXX is a person as defined by 12 U.S.C. 2602 ( 5 ) and provides real estate brokerage services, which are settlement services as defined by 12 U.S.C. 2602 ( 3 ).

Background Findings and Conclusions 4. Buying a house is one of the most significant financial transactions in the life of a typical consumer. Many consumers rely on real estate agents to guide them through this process.

5. A real estate agent is a professional who has passed all required real estate classes and passed the real estate licensing exam in the state in which he or she intends to work. A real estate agent must affiliate with a licensed real estate broker. 
6. In California, a corporate real estate broker may obtain a license to provide licensed services of a broker, subject to the appointment of a designated officer. Cal. Bus. & Prof. 10211. Real estate brokers are real estate agents who have completed additional licensing requirements which allow them to serve as brokers.

Ms. XXXX a real estate broker may work individually or arrange to have agents work under them. Although agents typically work for brokers as independent contractors, brokers generally have the ability to hire and fire their agents. Agents typically pay monthly office fees to affiliate with a licensed real estate broker. These fees pay for rental space and other expenses related to the costs of doing business. 
7. Brokers or agents often make recommendations to their clients for various services, such as mortgage lending, title insurance, or home inspectors. Among other things, RESPA prohibits brokers and agents from exploiting consumers reliance on these recommendations by accepting payments or kickbacks in return for referring consumers to particular real estate settlement service providers. 12 U.S.C. 2607 ( a ).

8. The act of prequalification requires a buyer to submit an application to a lender to obtain a certification that he or she has the ability to finance the transaction. Buyers sometimes voluntarily prequalify with lenders in order to demonstrate their creditworthiness to enhance their purchase offers. Sometimes sellers require a buyer to prequalify with a lender chosen by the buyer to help verify, before accepting the buyers offer, that buyer can afford to pay the offered price.

9. A referral includes any act which has the effect of affirmatively influencing a consumers selection of a settlement service provider, including a lender. 12 C.F.R. 1024.14 ( f ) ( 1 ).

10. Repeated payments connected in any way with the volume or value of the business referred... [ are ] evidence that [ the payments are ] made pursuant to an agreement or understanding for the referral of business. 12 C.F.R. 1024.14 ( e ).

11. As explained above, some of Respondents agents managed by the respondent steered consumers to Fairway Independent Mortgage Corporation, and required hundreds of consumers to pre-approve with Fairway Independent Mortgage Corporation. Respondent also gave Fairway Independent Mortgage Corporation preferential access to its clients, and forced clients to be pre-approved with Fairway Independent Mortgage Corporation, builders preferred mortgage lender by circumventing the builders requirements. These acts affirmatively influenced consumersboth directly and through Respondents agentsto use Fairway Independent Mortgage Corporation to finance their real estate transactions.

The Fair Housing Act requires owners of housing facilities to make reasonable exceptions in their policies and operations to afford people with XXXX equal housing opportunities. 
I was never given this opportunity as I was harassed and discriminated against by all parties involve to provide Fairway Independent Mortgage Corporation with additional documentation for a loan in which Fairway Independent Mortgage Corporation admitted that they could not do in which was to provide me with a 100 % loan. It took Fairway Independent Mortgage Corporation three days before they told me this and neither party would allow me to move forward with procuring a home. 
Therefore all parties involve should be discipline for their part in their discriminatory practices, and replaced accordingly for their part in the violation of the Fair Housing Act as well as violating my Civil Rights. In  addition to that XXXX XXXX XXXX should be compensated as a result of their illegal actions. 

Sincerely, XXXX XXXX XXXX. 
XXXX XXXX XXXX XXXX XXXX, CA. XXXX Email : XXXX or ( XXXX ) XXXX