Consumer complaint received 2017-12-01
Product: Mortgage — Other type of mortgage
Issue: Closing on a mortgage — 
Company: Cheney Financial Services, Inc. (UT)

My husband and I purchased a nice piece of property with {$69000.00} cash and sought out a builder to build our home. Our builder told us we could get started fast and easy with a lender named Cheney Financial. We talked on the phone with Cheney and they set up an appointment with the title company a week later. We were told we had to take {$25000.00} to title for Cheney Financial because that was the " cost " of the loan. A couple of days before our appointment I contacted Cheney because I thought it was strange that we had not received any documents or contracts or rules or anything from them. XXXX XXXX told me not to worry that we would get all of that at Title. My husband and I had never purchased, or built a home so this was all new to us. 
We built our home and continued to pour money into it even aside from the land because we wanted to have lots of equity in our home. We paid for all of the light fixtures and ceiling fans in the home, all toilets, vanities, sinks, faucets, water heaters and did the finish plumbing ourselves because my husband is a XXXX XXXX and we own a plumbing company. We also paid {$20000.00} of the excavation on the land. All together we had put well over {$100000.00} cash into our home. Cheney Financial funded the rest of the build. As construction neared completion we went to a mortgage company to get our long term mortgage. Much to our surprise we were not able to get a mortgage! We were told again and again that we had not been in business the required two years according to Federal Lending Laws. We spoke with more lenders than I can count and initially all of them would say, " Oh we should be able to get this done with your income and equity, send me your socials and bank statements and tax returns '' Ever hopeful, we would and it would always be the same story. We had n't been in business two years. I called Cheney Financial and told XXXX that we were not able to get a mortgage! He asked why and I told him what they all said. He said, " Ya, I knew that would be a problem, after the market crash all the laws changed '' ... I was in total shock. Why would this company lend us {$390000.00} knowing we could n't pay it back?! 
We had no idea and no understanding of the lending laws. Every Mortgage company we spoke with asked us if Cheney had told us to get a Pre Qualification or Pre Approval letter from a mortgage company. They did not. We did n't even know that term until this process. We felt like fools. We felt like we should 've known better or done our research or just should have known about this! We did n't speak about any of this to any of our family or friends because we were so ashamed. It was n't until the many lenders we tried to get a mortgage through kept saying the same thing, that it was Cheney 's fault. That they are a Lender and it is their responsibility to make the applicant aware of these laws.To make matters worse, even though the home was in our name, XXXX XXXX would not allow us occupy the home even though we had the certificate of occupancy and were paying a construction loan extension fee of {$4500.00} a month and the home was in our name! Mortgage brokers called XXXX on our behalf to plead with him to let us move in so we could pay down our debt that had accumulated due to the high cost of paying for all of this and to get my family out of a hotel room. One mortgage broker even offered to personally insure the loan promising that we would qualify once we had been in business 2 years and to please let us move into the home. XXXX 's response to that was, if we gave him {$40000.00} more, we could move in. We no longer had that kind of money. Cheney had stripped us bare. My family was forced to live in a hotel for 13 months when we had put so much cash and time and sweat into this home. The cost of Hotels and the construction loan extension fee every month was taking it 's toll on us financially and emotionally. Together our housing payments each month were {$7500.00}. Cheney was choking us out making it nearly impossible to pay our bills and the extension fee. We held on though and continued to work long hours and pray. My family was homeless. My XXXX year old and XXXX year old would ask when we could move into our new home that we had spent almost a year building and we just kept telling them that it was n't quite ready yet. We did n't know what else to say. We would go to the house often to let the kids play and do upkeep on the yard and house over that 13 months. We even had to go to the home daily to water the large lawn to keep it from dying in the 100 plus temperatures. It became a burden and a sore spot but we could n't let Cheney take our investment so we kept working non stop to pay for it. Many times XXXX would drive to the house and threaten us and question us as to why we were there. He said we should just let go that we gave it our best. He was watching the house like a hawk. It was insulting and uncomfortable and strange. He did a few inspections to make sure we were n't occupying the home.He threatened almost weekly that he was going to close in on the loan and call the loan due so we frantically continued to try lender after lender. We carried the homeowners insurance on the home as well. Another {$200.00} a month that we could n't afford and that Cheney insisted we pay. I asked why we would pay it if we ca n't live in it and should n't that be their responsibility and that 's when I found out it was in our name. XXXX said we had to carry the insurance because it was in our name. We were also paying the water bill to keep the grass watered, the heat bill in the winter to keep pipes from freezing and A/C in the summer to keep the floors and cabinets from warping. 
Our credit rating took a beating during this process due to excessive inquiries. We watched our scores drop by 8 points each, every time a mortgage insured credit report was pulled. We also had one 30 day late payment on our auto loan due to the financial strain. 
We had to get our family out of the hotels and into a home. We were so tired of moving all of our things from hotel to hotel every week because you can not " live '' at a hotel and the ones that do allow extended stay are n't clean or appropriate for children. School was starting and we were exhausted. One of the Mortgage lenders knew of a private investor who would pay off Cheney and allow us to occupy the home until we obtain our long term mortgage. The lending laws have since changed and now require you to be in business 5 years. The cost of this private money loan was {$30000.00}. 
The construction loan extension agreement we signed every month said that {$3200.00} of the {$4500.00} a month was coming off the principal. I will provide a copy. When the investor paid off our loan, not one penny had came off of the balance. In fact, it had gone up! To {$410000.00}. Cheney Financial preys on innocent people and we are a victim of his complete lack of moral and legal reverence. He has one "  customer '' that he brags has been paying him a construction loan extension fee for 11 years! That person is allowed to occupy the home but still, I feel sorry for this person and hope that he gets his home. In the contract it states that if a lender does not do their part to reasonably make sure that the borrower will be able to pay the loan back that there are severe consequences up to and including not having to pay back the loan. I feel Cheney Financial should have to face that consequence because of what he has put my children, myself and my husband through. Not just financially but emotionally. For months my little girl carried her little rolling suitcase everywhere she went. She would n't get in the car without it and as I sit here with tears rolling down my cheeks trying to type, remembering our suffering that still is n't resolved, I know in my heart that XXXX XXXX never cared. He was well aware of our suffering and he knew the laws and he knew we had just moved to Utah and just opened our own business. His motives were dark and every lender we talked to asked us if we were going to take legal action. Every lender we talked to said they had never seen anything like this and that they felt XXXX had a motive. In the beginning we did n't even understand what they were saying ... we do now. We did n't deserve this life changing horrible experience. We thought we were doing everything right when we bought our land and built our home. He knew the laws and knew we would n't get a mortgage. Being a business owner myself, I can not imagine misleading a customer for my own gain and if we did, surely we would have to pay the consequences. Let 's imagine for a moment if we had hooked up a gas line incorrectly in a customers home. Knowingly or unknowingly, either way as a business owner being licensed by the state to do that work, we should know the correct procedure and laws. Now imagine that persons home explodes. Would we not be held liable? Cheney Financial lent us money and they should n't have. XXXX said out of his own mouth that he knew we would n't be able to get a mortgage. He never instructed us to speak with a mortgage lender or get a pre qualification letter or even ask for any kind of financial background. Now, we are financially ruined and unable to get a mortgage for 3 more years. We are paying the investor {$5000.00} a month in interest only payments but at least we are living in our home finally and are n't homeless. We probably would 've sold the house a long time ago but we kept being told by each lender that they could get it done for us and that if we put it on the market it would ruin our chances because of a law prohibiting you to get a mortgage on a home you are trying to sell.Cheney Financial is a horrible company and only exist by cheating others.