Consumer complaint received 2018-08-12
Product: Mortgage — Conventional home mortgage
Issue: Closing on a mortgage — 
Company: U.S. BANK NATIONAL ASSOCIATION - SAN FRANCISCO MAIN BRANCH (WA)

On XX/XX/2016, I entered into a Purchase and Sale Agreement ( PSA ) to purchase a home in XXXX. The PSA included a XXXX XXXX in the event that I was not able to secure financing to purchase the home. The PSA had an intended closing date of XX/XX/2016, and the PSA required a deposit of {$50000.00} of earnest money, which was deposited to an escrow account with XXXX. My application for a home loan from Union Bank was completed on XX/XX/2016. On that same day, I was given assurance from XXXX XXXX, Union Banks mortgage broker, that I have received the purchase contract and am aware of the finance addendum 22A. In the event that Union Bank can not provide a loan approval that meet your criteria then a formal denial will be issued so your earnest money will be fully refundable. ( 1 ). 

It was subsequently discovered, at Union Banks own appraisal, that the property at issue had several problems, including an unventilated stove in the basement. As this is a known healthy and safety hazard, not to mention a violation of building code, Union Bank initially insisted that the basement kitchen meets code as part of its list of Approval Conditions ( 2 ) & ( 3 ).  Unbeknownst to me, XXXX XXXX was also engaging in email conversations with the sellers agent ( 4 ) and then without explanation, on XX/XX/XXXX, XXXX XXXX claimed that the Banks underwriters had signed off on their previous conditions and that the loan was approved. When I asked for an explanation for the change in the Banks stance, I was not given one. 

This matter was eventually escalated to Union Banks Customer Resolution Manger, XXXX XXXX. I was placed in limbo for about 2 weeks while the matter was being investigated and I had no idea whether or not my loan would be approved and whether or not I would be able to purchase the home. Finally, on XX/XX/XXXX, 3 days prior to the closing deadline, I was told that the bank had approved the loan, and closing paperwork was sent to escrow the following day, on XX/XX/XXXX. 

During this period of limbo, I notified our insurance company, XXXX XXXX, of the known safety hazard in the homes basement kitchen. The XXXX XXXX underwriters made the decision that they could not offer insurance on the home, and I was notified of this decision on XX/XX/XXXX. I immediately notified Union Bank of XXXX XXXX decision, and XXXX XXXX informed me if the insurance company withdraws its coverage, we can not proceed with the loan ( 5 ). The morning of XX/XX/XXXX ( day of closing ), I spoke with my insurance agent at XXXX XXXX, who confirmed that the insurance binder would be pulled. He then spoke with XXXX XXXX personally to inform her of this change, and he confirmed this with me over the phone around XXXX and later that day via email ( 6 ). I notified XXXX of the change and that I would not be able to sign closing paperwork, however Union Bank did not follow through with its denial of the loan for several days. The bank was under an obligation to timely notify the escrow agent of the change and to have the closing paperwork pulled, as outlined in the conditions of the financing contingency in the PSA. Instead, XXXX XXXX went silent, apparently and inexplicably told XXXX to hold onto the loan documents ( 7 ), and continued to assert that the loan was approved into the following week, despite my having lost insurance on XX/XX/XXXX ; however, the Bank eventually issued a Statement of Credit Denial, Termination, or Change on XX/XX/XXXX ( 8 ). 

Despite clear evidence that I was unable to achieve financing by the date of closing, XX/XX/2016 ( 9 ), and my meeting of the terms of the financing contingency in my PSA, Union Banks handling of my loan denial resulted in the loss of my earnest money. In the ensuring litigation between myself and the seller, the failure of Union Bank to timely notify XXXX of the loan denial and continued assertion that the loan was approved was pivotal in the decision against me, and resulted in my losing my earnest money, attorneys fees, and sellers attorneys fees. Union Bank is liable for these financial losses. Moreover, the Banks handling of this matter, from false promises to secret communication with the sellers agent, was inappropriate and immoral. The Bank was not looking out for the best interests of its customer but instead tried to push through a loan on a house with a known safety hazard. When I tried to advocate for my rights as a consumer, the Bank left me in limbo and then failed to follow through at the last minute, on day of closing. And when I tried to advocate for my earnest money in court, the Bank again abandoned me and refused to offer any supporting documents for my case and refused to take any liability for my losses.