Consumer complaint received 2021-06-28
Product: Mortgage — Conventional home mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage — 
Company: CITIBANK, N.A. (NY)

I am the holder of a Citibank mortgage on the XXXX house where I and my family have lived since XXXX. On several occasions in XXXX, Citibank sent me mailings and emails inviting me to apply for a refinance, Now would be a great time to refinance, or words to that effect. As it happened, because the interest rate on my 7-year ARM will adjust in XXXX, I have a keen interest in refinancing my loan at a time when interest rates are low. I therefore responded to the repeated Citibank solicitations and was contacted on the phone last fall by XXXX XXXX, a Citibank loan officer. 

In my first conversation with Ms. XXXX and in a subsequent email of XXXX XXXX, XXXX, I described my financial situation to her in detail, telling her that I was semi-retired but continued to earn income as a XXXX XXXX ; my wife and I also have income from rental properties, social security, stock and bond holdings, and a pension. I laid out the sources and amounts of this income and asked Ms. XXXX to review the information and to assess whether I would qualify under the bank 's guidelines for a refinance, because if I didn't qualify, I didn't want to undergo the expense and bother of an application. 

On XXXX XXXX, I received an email from Ms. XXXX saying, I have completed the review of this refinance, which I reasonably took to indicate that, assuming I could document what I had told her about my financial situation, the bank 's guidelines would not prevent it from approving my application. At this point I sent in my application and submitted tax returns, bank and brokerage statements, rental contracts for my wife 's and my investment properties, the contract that I have in my capacity as a freelance writer, a profit and loss statement, statements of our total assets, letters verifying my social security and pension payments, and other materials. The documentation regarding my income and assets exactly matched what I had told Ms. XXXX in our very first conversation and in my email of XXXX XXXX. 

Around that time, Ms XXXX told me in a phone call that the refinance rate would be 2.67 percent for a ten-year ARM and she urged me to lock it in, which I did. To do this, she said, I needed to pay the application fee of {$1300.00}, and I paid it immediately. If there were any problems based on what I had told Ms. XXXX or regarding the documentation I had submitted, she did not inform me of any, and it was on that basis that I paid that considerable fee. 

In XXXX, I received a letter from Citibank and an email from Ms. XXXX informing me that my application had been turned down. However, the notice also said that I qualified for a lower amount, namely {$970000.00}, rather than the original {>= $1,000,000}. I was interested in that as an alternative and had the funds to pay down the mortgage by the required amount, but first I emailed Ms. XXXX to ask if she could tell me why my application had been turned down. 

She replied on XXXX XXXX saying, The income we originally had down was much higher than the verified income. I knew this statement to be false, and I asked Ms. XXXX for further explanation. She emailed me the items that, according to the bank, made up my verified income. It accurately included my social security, dividend, pension, and retirement income, but the figure it had down for my base income was {$1700.00} per month, which is ridiculous. In fact and as I fully documented to the bank, in accordance with one XXXX  contract alone, I receive a retainer of {$6600.00} per month, an amount that appears to have been entirely excluded from my verified income. Equally surprising to me, the fully documented rental income that my wife and I have steadily received for more than fifteen years on our investment properties was entirely absent from the bank 's verified income. That income is $ XXXX/ month gross, or nearly $ XXXX/ month net. In other words, the bank excluded more than $ XXXX/month of net before tax income that I had told Ms. XXXX about on the phone and in an email and that I had exhaustively documented. 

Perhaps the bank excluded my freelance income because I can not prove that it will continue forever into the future, but if that is the case, it is exactly the sort of consideration that Ms. XXXX could and should have taken into account at the very beginning of our encounter, but she did not do that. Nor was there any request from the bank to demonstrate that my freelance income will continue If there had been such a request, the bank would have learned 1 ) that the contract by which I receive my monthly {$6600.00} retainer has been extended indefinitely and 2 ) I have a new contract in the amount of {$75000.00} to be paid out over the next 18 months. Nor did Ms. XXXX or anyone else offer any explanation for the entire exclusion of the rental income that my wife and I receive, and will continue to receive, from our investment properties. 

At this point, I wrote to XXXX XXXX, the CEO of Citibank pointing out these facts and asking that the rejection of my application be reconsidered. I did not receive a reply from Ms. XXXX, but soon thereafter Ms. XXXX emailed me to tell me that she had escalated my application for further review. Several weeks after that, I received a letter from Citibank saying that my application had been turned down, with this explanation : Insufficient income for total obligation. This time, however, there was no offer of a refinance at a lower amount. When I asked Ms. XXXX why the alternate offer had been withdrawn, she did not reply. There was no explanation for the exclusion of my freelance and rental incomes. 

I wrote again to Ms. XXXX asking for a refund of my application fee. In response, I received a letter from the Citibank legal department turning down my request.

Then, ironically, about the two weeks after I received the notification that my application had been denied, I received an email from Ms. XXXX addressed personally to me : XXXX, it said in large type, Refresh your mortgage. Get more out of your home. Contact me to get started with a mortgage refinance today. 

The above sequence of events leads me to believe that Citibank utterly and abysmally failed to negotiate in good faith. The bank actively solicited a refinance application from me, which it then arbitrarily and unreasonably turned down, and this arbitrariness and unreasonableness combined with its demonstrable bad faith renders the application contract void. For these reasons, I am requesting that the application fee be refunded in the full amount of {$1300.00}. 

Thank you for your attention to this matter.