Consumer complaint received 2018-08-12
Product: Mortgage — Home equity loan or line of credit (HELOC)
Issue: Trouble during payment process — 
Company: AMERINATIONAL COMMUNITY SERVICES, INC. (NC)

I applied for a rehab loan at 0 % which the City of XXXX, as Lender, said was under the Federal H.O.M.E. program. The commitment letter was for {$67000.00} in funding, and I found numerous mistakes in calculations, which were corrected by hand notation of both parties. 

They told me that I had to repay all of the money ( {$67000.00} ), {$35000.00} of it deferred until I move or sell. This is despite the fact that forgiveness was granted to nearly all people of color who participated in the plan - one of whom actually became one of their approved contractors shortly after getting his free repairs.

The Note and Mortgage which they authored refer to the funds as a " Loan '', not as a line of credit. This means they are obligated to lend me the full amount, for the full scope of approved work. The lender required that I execute the construction contract they wrote, without modifications, even after pointing out several conflicting passages. They also limited the contractors I might hire via an onerous process for approval. As a result, I used one of the contractors they recommended, and with whom they do business on an ongoing basis. They also designated a " rehab specialist '' to periodically inspect the work, and keep financial records.

Problems arose with the process right from the beginning, but we are all human and can make errors. First, the lender attempted to deny me funds by not " factoring up '' my social security income before calculation ratios - and that is a Federal requirement. They also required that I refinance my existing mortgage before closing, which cost me thousands in closing costs and additional interest beyond the MIP I eliminated. They refused to allow corrections to the contract, or even to make loan document templates available to me before signing so I could have an attorney review them. Despite their own contract stating that I had only 30 days to both execute a construction contract and for the construction to begin. They created exposure to liability by demanding I execute a contract before closing, contrary to the documents they authored and provided. 

After the construction started, several problems arose which violated provisions of both the loan agreement and the contractor agreement. When a resolution was not achieved, I contacted the FHA 's department over the H.O.M.E. program. The response from the City was that they didn't use Federal monies for my loan, which is contrary to brochures, letters, e-mails and the construction contract. 

The first draw payment to the contractor was made as approved, despite it including partial payments and structured contrary to the bid on file.

The construction proceeded and became more and more out of schedule : I requested a revised schedule in order to plan for the work. I asked that they do not release funds until I have both a new schedule and correction of the defective and incomplete work. Neither happened, instead, two City employees showed up on a day when I already told them I was sick in bed, demanding discussion of matters already discussed, and it became a homeowner-bashing session between them, the Rehab Specialist and the Contractor. I told them that " if you aren't doing work, you need to leave ''. 
They refused. I had to get the police to tell them to leave. The contractor and his staff remained and continued working.

Then one day later, the contractor and his workers left ( leaving tools, waste, and materials behind ) and never returned. I received no explanation until two months later, which indicated that the City had pulled him off the project. ( His allegation that I did so is disproven by near-daily e-mails to the contrary, which were asking when work would resume. ) My home was left with a non-functioning kitchen, a faulty electric system ( I had three fires as a result ), damaged flooring, defective window installation resulting in water causing mold, concrete work which is spalling after only 2 years, loose and detached stairs and railings at all my entrances, no deck, no gutters and downspouts due to warping/lifting fascia, and other problems. 

This was after the Contractor filed a Lien. The City, as Lender, without my permission and without even notification, paid off the amount. They claim they are justified in doing so because of the " Rehab Specialist '' making a determination as Arbitrator. He did not. My appointment with him to discuss the matter was cancelled, without explanation even after multiple requests. He did not conduct any semblance of arbitration : that would require him to consider both sides, which he not only refused to do, but also included monies for defective and incomplete work, which is contrary to the contract. 

The contract provides for additional and alternate contractors completing the scope of the work when the initial contractor can not. They also refuse me this option. And correction of the problems is an additional cost.

The City, as lender, now expects me to pay back they money I did not authorize, which violates both the contract and lending practices, and which creates an untenable financial burden on me since I have had to spend all my money plus {$12000.00} IN CREDIT CARD DEBT to make my house safe, correct the defects, and complete some of the work.

I filed a claim with the Contractor 's insurance company only to be told he did not have the requisite Contractual Liability coverage, which was to be confirmed by the City as Lender. His coverage only covers consequential damages, but that alone was offered to settle for roughly {$9000.00}. The actual costs to repair/replace/correct and complete is roughly {$20000.00} While the City as Lender has chosen to reduce the amount to reflect only the two draw payments they made ( despite the 2nd payment being clearly objected to ), they have not reduced the Note amount. So it claims nearly {$20000.00} OF EQUITY in my property to which they are not entitled by their own admission. THAT MEANS I CAN'T REFINANCE OR GET A LOAN BELOW THE CREDIT CARD RATE.

The first {$35000.00} of the loan is deferred, at zero interest. They are demanding that I make payments on an additional {$18000.00} CREATED BY THEIR UNAUTHORIZED PAYMENT TO THE CONTRACTOR.

As a result of their unwillingness to correct the situation to any significant degree, after several months trying to rectify, I have stopped making this payment.

As a result, my credit score is now horribly low from the late payment and carrying {$12000.00} of credit card debt - it was excellent before this : in the 800 's. 

Attorneys want {$5000.00} TO GET STARTED, which is money I do not have. I have spent thousands of dollars which were unnecessary, and living on social security income, can not afford. I now have no savings, only debt. 

And one year after this horrific experience, they revised the program to forgive up to {$90000.00} IN DEBT for homeowners, regardless of location within the City. Regardless of age, and I'm 2 years over the XXXX year old minimum to qualify. But they still refused to do anything. They have made no gesture of good faith in any of this, and I have to wonder how many other people they have victimized under the guise of a Federal program.