Consumer complaint received 2017-07-08
Product: Mortgage — Conventional home mortgage
Issue: Closing on a mortgage — 
Company: UNITED SERVICES AUTOMOBILE ASSOCIATION (FL)

Illegally or improperly charged a penalty for a rate lock extension which was not our fault. USAA substantially contributed to the delay which resulted in the penalty as a result of their illegally or improperly applying law, regulation, or USAA policy. We applied for the loan on XX/XX/XXXX and it was assigned # XXXX. We locked a rate for THIS loan on XX/XX/XXXX and agreed to a closing date of XX/XX/XXXX, the lock was to expire on XX/XX/XXXX. On or about XX/XX/XXXX we received a phone call from USAA saying there were issues with the Master Insurance Policy provided by the HOA and the loan had been DENIED. We explained we believed there was a mistake and we would work to correct it. Our Realtor was able to resolve the issue and documentation emails were provided to the USAA processor on XX/XX/XXXX. The processor advised the loan had been officially denied and USAA policy was that the decision was final and no changes would be considered, in affect the loan & any commitments by either party had cancelled the contract according to USAA. We were advised if we resolved the insurance issue we could re-apply for a NEW loan. We re-applied for a new loan immediately and USAA assigned # XXXX to it. In effect, & in law we had a NEW contract agreement with a NEW USAA contract number. Documents that had not expired ( i.e. the appraisal ), were electronically transferred to the new loan for the convenience of both parties. Sometime later we were advised we were being assessed a penalty of {$1400.00} for the extension of the lock from the PREVIOUS loan. We immediately disputed this penalty on the basis this was a NEW loan and USAA had cancelled the previous agreement. We asked them for a basis for the penalty. We discussed this with multiple individuals ( names provided on request ) and were given various justifications. One said banking laws like Dodd-Frank required the penalty, when questioned another said maybe it wasnt required but allowed by Dodd-Frank. Others said banking laws & regulation either required the penalty or allowed it. Although all said they could waive the penalty, but said USAA policy required it and no one would exercise the discretion not to collect the penalty, since they had a right to impose it. I consistently reminded each person, just because you have a right to collect a penalty does not make it the right thing to do. I believe I did everything I could to resolve this dispute in a timely manner and in the end was told they were maximizing profit which benefited me as a member. I was told if I did not like the decision I could file a complaint with the CPFB since management & lawyers believed they acted appropriately and USAA would back them up. All discussions with USAA were recorded by them and should be available for internal review to confirm my recollection of what I was told and my attempts to resolve this dispute in a timely manner. I tried unsuccessfully to explain it would be easier to resolve BEFORE closing when the penalty was collected, then to refund it later. In my words to them, as a member we should work inside the family, not by a CPFB complaint. I made it clear that as a loyal USAA member since XX/XX/XXXX and with XXXX children, & XXXX grandchildren that have accounts with them I was not happy. Lastly I politely told them in my opinion this member service issue reminded me of the recent XXXX XXXX issue where originally the XXXX CEO said the employees who forcibly removed a customer from a plane had the right to do so by XXXX policy as a defense. A few days later he corrected his defense and acknowledged that had not been the right thing to do to a customer. I wonder how the USAA CEO might react to his lawyers defense that USAA acted appropriately in this matter because they have a right to do it. Respectfully submitted. Enclosures : Lock in Agreement dated, XX/XX/XXXX Loan # XXXX USAA Notice of Action Taken dated, XX/XX/XXXX Loan # XXXX Closing Disclosure dated XX/XX/XXXX, Loan # XXXX ( showing NO penalty ) Closing Disclosure dated XX/XX/XXXX Loan # XXXX ( {$1400.00}. Penalty )