Consumer complaint received 2016-10-08
Product: Mortgage — VA mortgage
Issue: Credit decision / Underwriting — 
Company: STONEGATE MORTGAGE CORPORATION (MD)

XX/XX/2016 my family spent {$620.00} in flights and rental car along with {$260.00} in hotel expenses so that we could spend three days finding our next home due to military XXXX. Stonegate Mortgage currently had my first Veterans home loan in XXXX, therefore, I decided to seek out their ability to complete my second tier Veterans Affairs home loan for a XXXX home purchase in XXXX for {$350000.00}. Stonegate Mortgage was the only lending institution that stated that they could approve my loan with XXXX out of pocket expenses. Despite me asking numerous questions about the second tier VA home loan and potential out of pocket expenses due to partial use of my Veterans entitlement, Stonegate continued to confirm that they could approve my loan with XXXX down payment or additional cost to me as the purchaser. I actually received a letter of commitment from Stonegate prior to departing my previous duty location in XXXX XXXX, XXXX. This letter of commitment set me in motion to depart XXXX with the expectation that I would close on the home to be purchased within seven days of arrival in XXXX, XX/XX/2016. Two days after I departed XXXX while driving with my household goods, XXXX pets, and XXXX children I received a call stating that they made an error in their interpretation of the VA second tier guidelines and now needed to contribute {$22000.00} in order to cover down on XXXX % of the exceeded VA entitlement for the county ( XXXX County : {$510000.00} ) I was purchasing in, given the partial use of of my VA Entitlements ( {$250000.00} for my home in XXXX ). I quickly informed Stonegate that I had asked the question about partial use of my entitlements throughout the loan processes and received nothing but reassurance that the loan would be approved. Furthermore, I informed Stonegate that they clearly could see my financial assets and already knew that I did not have $ XXXX available anywhere for this down payment on this home purchase. Stonegate apologized and said that they would further their research to see if they could find any other work around for the loan to be approved, but later explained that they could not assume the risk given the fact that the VA would not insure XXXX % of the remaining balance of the loan ( {$89000.00} ). I explained to Stonegate that my family and I wholeheartedly trusted them throughout this process and had no reason to doubt that I would not close on the house to be purchased by XX/XX/2016 given the home/termite inspections, appraisal, and letter of commitment which was forwarded to the seller agent and seller. I confirmed that I did not have the $ XXXX needed to close and therefore, needed them to figure it out as this was their error. To my surprise that same day ( two days after receiving my letter of commitment, I received a letter of denial stating that I had insufficient funds for approval and an apology email. My family and pets had to live in a hotel upon arrival in XXXX for 7.5 weeks amassing a debt of {$3800.00} in hotel expenses and {$2400.00} in meals while we searched for another home to purchase. These expenses were not forecast and therefore caused undo mental, physical, and financial stress. My family and I had to fight with Stonegate just to get reimbursed for the home/termite inspection and appraisal fees. My family and I feel that Stonegate should be responsible for more than just the fees but should also be held responsible for the inconvenience and financial burden placed on our family given their misleading information throughout this process which led my family into turmoil.