Consumer complaint received 2018-04-14
Product: Mortgage — Conventional home mortgage
Issue: Closing on a mortgage — 
Company: U.S. BANK NATIONAL ASSOCIATION - SAN FRANCISCO MAIN BRANCH (CA)

I have been a longstanding MUFG Union Bank client for the past 20 years. For the first time, however, I have encountered demonstrable unethical practices and acts of incompetence that call for immediate awareness and correction. 

There are, in fact, two separate matters of contention, both of which revolve around three simultaneous refinances that I did with Union Bank in XX/XX/XXXX. All of these events occurred through the downtown XXXX XXXX Union Bank branch at XXXX XXXX XXXX XXXX. XXXX XXXX, XXXX XXXX, CA XXXX. 

The first involves an undocumented and last minute charge on my a refinance of my current residence. I was reassured numerous times and all during the refinance process that there would be no points on this refinance. This was documented in emails, bank disclosures, preliminary closing statements, and conversations with my Union Bank mortgage consultant, XXXX XXXX XXXX. However, XXXX XXXX deceived or misled me, because on the day of the actual signing, the bank charged me 0.125 points for the loan ( {$1300.00} ). This charge was not brought to my attentenion until the notary showed up with the paperwork. To repeat : it was documented that the loan would be zero points, not 0.125 points, in all previous documents and discussions. 

To remedy the error, I immediately wrote to XXXX XXXX. He confirmed that it was in fact an error and that he would look into it. Because so much hard work went into this refinance, I signed the documents anyway, trusting that XXXX XXXX would correct the error to which he himself admitted. I also called XXXX XXXX and spoke to him directly at his office and further followed up with an email. Then something inexplicable happened : he returned my email stating that there was nothing he could do and defensively added the irrelevant point that he saved me over seven thousand dollars a month with the refinances he did. I had not encountered this kind of unprofessionalism from any Union Bank representatives until that episode with XXXX XXXX. The total amount is admittedly small, but that is not the point. The point is one of principle, but to this day, my concerns about the last minute charge of {$1300.00} have gone ignored. 

The second point of contention is more serious. In XX/XX/XXXX, I applied with Union Bank to refinance the aforementioned 3 properties. In order to refinance the three properties at once, I was told that I would be required to do three things : first pay down the loan of one of the properties, second, pay the first half of the years property taxes on all three properties, and third, have any and all credit card statements at XXXX balance. I was also told that this could all be done through the closing process, which also required my bringing approximately an additional XXXX XXXX XXXX  XXXX XXXX dollars to the closing costs. 

I told XXXX XXXX that I did not have these funds available. He cheerfully responded that Union Bank solves problems. He suggested a solution that I thought made sense and was viable. He suggested that I apply for a XXXX line of credit that could be tied to my savings account at Union Bank. Because I already had XXXX in my savings account, and despite the fact that that money was not available to be used for closing costs, XXXX XXXX suggested I had enough funds in that account to warrant applying for this line of credit. This line of credit, he assured me, would allow me to have the funds available to close. And in order to apply for it, XXXX XXXX directed me to XXXX XXXX XXXX, Union Bank private banker. 

My dealings with XXXX XXXX were where the serious problems began. Through the assistance of XXXX XXXX, I obtained my line of credit. However, shockingly, after the close of my three simultaneous escrows, my aforementioned savings account containing XXXX was made unavailable to me. When I asked XXXX XXXX about this, he was also confused. To resolve our shared confusion over this baffling situation, he assured me he would look into it. After several days, XXXX XXXX informed me that my savings account containing XXXX that was used to get the line of credit was locked and would be unavailable to me until the line of credit was paid off. This is, of course, outrageous, because it goes against the very point of getting the line of credit in the first place. Its like getting a car loan, but only upon the condition that the car is locked until ones loan is paid off. Obviously, I would never have agreed to this kind of ridiculous arrangement if I had known about this bizarre condition on the line of credit, especially since I had a solid competing refinance offer from XXXX XXXX that I would have chosen instead. To be sure, XXXX XXXX never mentioned that my savings account would be locked, restricted, or unavailable. Indeed, I thought that the line of credit would be simply what the term entails, and that it would be similar to other lines of credit I had with Union Bank. Around XX/XX/XXXX I was given a line of credit for XXXX ; I paid it back within 4 years, and it never forced a lock on any of my accounts. 

To understand whether extending a line of credit on the condition of locking ones other assets was a new practice, I consulted banking professionals about it. I spoke extensively with a managing director at XXXX XXXX for 25 years, a managing director at XXXX XXXX XXXX for 26 years, and a managing director for XXXX XXXX. Every single one of them were baffled and appalled at how my Union Bank line of credit was handled. They told me in no uncertain terms that the policy was peculiar and confirmed that the bank put me in an unfair position. 

Knowing that the situation had to be fixed, I met again with XXXX XXXX in late XX/XX/XXXX. I reiterated to him that this was not anyones understanding of what constitutes a legitimate line of credit. And indeed, nowhere on the loan document that I signed was there any proviso stating that funds in my savings account would be locked. This is the meeting when XXXX XXXX displayed conduct more fitting a check cashing center than a reputable bank. Rather than working towards a suitable solution, he tried to cover himself by claiming that he in fact did mention that my savings account would be locked pending payoff of the full line of credit. The claim that he conveyed this policy was, of course, absolutely untrue, for two obvious reasons. First, had he really conveyed it to me, I would not have agreed because it is an absurd one. Second, XXXX XXXX would not have been surprised when news of the locking was made apparent to him, but he most certainly was surprised. 

I met with XXXX XXXX yet again in lateXX/XX/XXXX to try to address the paradoxical nature of giving a line of credit that involves freezing access to ones other accounts. Thankfully, during this meeting, XXXX XXXX recognized that this is not how a line of credit works and that I was in a difficult situation. He then suggested a solution : that I apply for a XXXX HELOC on my primary residence for which he assured me I was qualified because my debt/loan ratio and income looked good. This way, I could use XXXX to pay the aforementioned line of credit off and to regain access to my savings account, and have another XXXX to use or not. Although this is very a circuitous route to the end goal, which would have been served by a correctly executed line of credit from the get go, given that my savings account was frozen, I felt this was my only solution. XXXX XXXX then conveyed to me personally that this would be a sure thing and solve the problem once and for all. However, the HELOC application was denied, despite XXXX XXXX assurances. 

XXXX XXXX practices and behavior are appalling two reasons. Firstly, XXXX XXXX misled me regarding the nature and conditions associated with a Union Bank line of credit. Secondly, he misled me again by reassuring me that a solution was in place when in fact there was no such thing. I do not know whether this was done out of malice or incompetence. Either way, this type of unprofessionalism is unfitting for Union Bank. At the very least, I do not wish to work with XXXX XXXX again, as he has repeatedly demonstrated violations of fiduciary responsibility and ethical norms. 

Both of these situations I write to you about, the first with XXXX XXXX and the second, and more serious, with XXXX XXXX, deviate from standards governing good business practices and undercut the integrity of Union Bank.