Consumer complaint received 2018-09-03
Product: Mortgage — Home equity loan or line of credit (HELOC)
Issue: Applying for a mortgage or refinancing an existing mortgage — 
Company: JPMORGAN CHASE & CO. (CA)

This is a follow up to complaint # XXXX XXXX XXXX, a research analyst at Chase Executive ( XXXX, extension XXXX ), contacted me twice in response to the CFPB contacting Chase regarding the above complaint. She reviewed my file and found that : -- her underwriters had made no errors -- our debt/income ratio was 69 %, and their " guidelines '' require a debt to income ratio of 43 % or better, therefore, we did not qualify for the loan we asked for. 

I asked her to provide me with the written " guidelines, '' and she refused. I asked who developed the guidelines and she said Chase in conjunction with their legal department. 
I asked her what, according to their calculations, our debt/income ratio is currently, BEFORE any loan ( we are at the end of a {$500000.00} HELOC with Chase ) ; she said it was 13 % ( well within the guidelines ). How, I asked, did it jump so much in the loan evaluation? 
Her answer was that the " guidelines '' required that they take 1 % of the maximum loan amount requested, and include that as part of the " DEBT '' in the numerator : {$5000.00} added to our monthly cash outflow. I tried to point out that this was arbitrary, but it was " required under the guidelines ''. Here are the facts : The monthly debt service on {$500000.00} for 15 years at 5 % is just under {$4000.00} per month. The 5 % rate is very conservative, since prime was the highest rate we were offered, and prime is currently 3.75 %. So the {$5000.00} " guideline '' does not have any basis in reality -- it inflates our cash outflow ( AKA " debt '' ) by more than {$1000.00}. 
I tried to get her to explain why we had been credit worthy for the {$500000.00} HELOC in 2nd position 15 years ago -- when we had more debt, fewer monetary assets on deposit, and our home and 2nd rental property were worth far less, but her answer was " GUIDELINES are always changing. '' She also stated that there is no such thing as a " first position HELOC '' -- even when there is no mortgage. All HELOCs are treated the same, according to the " guidelines. '' This makes no sense in terms of a financial institution 's loan evaluations. Order-of-payment is a major factor. 
She stated that our demonstrated credit worthiness with Chase of over 15 years, and worthiness with other big banks could NOT be considered in the loan decision -- because of the GUIDELINES. 
Most troubling, when I asked why our amounts on deposit could not be considered as sources of cash to pay off any loan with Chase, she demanded to know if I had talked to any OTHER lender and asked if OTHER lenders were considering monetary assets in their decisions. I inferred from this that there was COLLUSION among the banks as to the arbitrary guidelines, and that XXXX XXXX was trying to see what other banks had violated this agreement to ignore assets. 
I believe that the " guidelines '' themselves are illegal -- and that they have been developed in collusion with other big banks. Moreover, guidelines are not supposed to be laws with zero tolerance for deviation -- they are supposed to be " bright line '' tests for evaluating UNKNOWN loan applicants. We have a long personal history with Chase. 
Please review the dollar amounts and the situation described in our original complaint. In substance, CFPB : If we are not credit worthy, who is? I know that a set of guidelines can be rigged to make anyone look un-creditworthy -- in Form. The arbitrary {$5000.00} add on to cash outflow is an example of that.