Consumer complaint received 2022-06-07
Product: Mortgage — Conventional home mortgage
Issue: Closing on a mortgage — 
Company: DELMAR FINANCIAL COMPANY (OH)

XX/XX/2022 Under contract on a home purchase, {$280000.00} home, 5 % downpayment. Set to close on XX/XX/2022. 
XX/XX/2022 1st loan estimate was issued- {$5200.00} in closing costs. Transfer taxes are not listed, the underwriting fee is not listed, and the Services you can shop for are severely underquoted. Initial escrow payment is listed at 2 months of homeowner 's insurance and 3 months of property taxes. 
XX/XX/2022 2nd loan estimate was issued- {$7300.00} in closing costs. Points were added. Transfer taxes are not listed, the underwriting fee is not listed, and the Services you can shop for are severely underquoted. Initial escrow payment is listed at 2 months of homeowner 's insurance and 3 months of property taxes. 
XX/XX/2022 3rd loan estimate was issued- {$7300.00} in closing costs. Transfer taxes are not listed, the underwriting fee is not listed, and the Services you can shop for are severely underquoted. Initial escrow payment is listed at 2 months of homeowner 's insurance and 3 months of property taxes. 
XX/XX/2022 4th loan estimate was issued- {$7600.00} in closing costs. Added co-borrower to financing and raised downpayment to 20 %. Transfer taxes are not listed, the underwriting fee is not listed, and the Services you can shop for are severely underquoted. Initial escrow payment is listed at 2 months of homeowner 's insurance and 3 months of property taxes. Total cash to close was quoted at {$60000.00}. 
XX/XX/2022 The closing company sends the initial XXXX to Delmar XXXX. This XXXX did not include a full year of escrow taxes because this happens when the bank comes back to the closing company to balance all of the fees. The closing company does not know if the bank will only collect escrow for a few months or if they will require a full year of taxes. 
XX/XX/2022 I receive XXXX from the closing company. There is a {$5700.00} discrepancy between the XXXX and loan estimates. 
XX/XX/2022 I sent XXXX to Delmar XXXX. The realtor and I realize the majority of the discrepancy is coming from Lender 's Title Insurance and Transfer Taxes. 
XX/XX/2022 The realtor called Delmar and told them about the discrepancies, asking for the compliance department to review the loans. I receive a phone call from the Delmar XXXX loan officer, we were threatened with litigation and a loan officer tried to guilt us into signing a new loan estimate as a " remedy '' for the discrepancy. Additionally, after we expressed that we would walk away and were concerned about losing the earnest money- we were told Delmar could issue a financing denial letter. We have been told that could be fraudulent. This is all available on recording phone calls recorded by Delmar XXXX. 
XX/XX/2022 Recieve closing disclosure. At the top of the closing disclosure, it says " This form is a statement of final loan terms and closing costs. Compare this to your loan estimate. '' - it says that on the closing disclosure we signed on XX/XX/2022. The total closing costs listed on the closing disclosure are {$6600.00}, making the cash to close {$57000.00}. There is an underwriting fee for {$400.00} under loan costs that was never disclosed. There is a lender credit for the transfer taxes. 
XX/XX/2022 Receive a second closing disclosure. The total closing cost listed on this closing disclosure is {>= $1,000,000}, with cash to close at {>= $1,000,000}. This indicates a 65.18 % increase in closing costs, and closing is 3 days away at this point. This also contains charges for items already paid, including inspections. 
XX/XX/2022 We speak with the loan officer. The loan officer tells us that they will not be moving on any of the fees, and this is how they do business. They seem completely ignorant of the fact that my issue is not with the fees, but with the lack of disclosure of the fees. 

I have spoken with loan officers and managers and tried to address this amicably. They said " This is how they do business '' and are refusing to move on any of the fees. 

Here are my main issues : The federal TILA-RESPA requires banks to provide a Loan Estimate in good faith and based on the best information reasonably available. We have reason to believe we did not receive a good faith estimate. We believe our original loan estimate was underestimated. Specifically, my Lender 's Title Insurance was underestimated by 58933.3 %. The cost of the lender 's title insurance is publicly available on XXXX. This is a 10 % tolerance item as it is a fee paid to an unaffiliated 3rd-party when the member is permitted to shop. 
Secondly, my lender 's fees went up between estimates and closing disclosure. The underwriting fee was never disclosed until XX/XX/2022. From my understanding of TILA, this is a zero-tolerance item as it is a lender fee, so we should not be responsible for this {$400.00} charge. See Consumer Financial Protection Bureau 's website. 

The transfer taxes were never included, and this has been addressed via lender credit. 

My escrow amount was never disclosed. We were unaware you were requesting a year in advance. Up until this point, we had only seen 3 months for property & school taxes in initial escrow, this is reflected on all of the loan estimates and the closing disclosure we signed on XX/XX/2022. Per TILA, this amount can increase by any amount. We do not understand why we were not told this until yesterday. All four loan estimates and the first closing disclosure reflect this. It is also reflected in the " Other '' section instead of Initial Escrow Payment at Closing - why? 

My closing disclosure from XX/XX/2022, has an adjustment for - {$1600.00} in section L. This was taken away on the closing disclosure on XX/XX/2022, with no explanation ( except that we were told " Oh it's different everywhere else in the country besides where you are buying your property '' ). This line item was then increased to {$720.00}. That is a 143.6 % increase. Also, never disclosed. It seems this is a tax item. 

We received a closing disclosure with the statement at the top that it is FINAL. Why did we receive another one 4 days later with a 65.18 % increase in closing costs? 

We have been told by the closing company that Delmar received the information from them on their fees on XX/XX/2022. We were never issued a new loan estimate and were unaware of this information until I inquired with the closing company. 

On XX/XX/2022, we were threatened with litigation and a loan officer tried to guilt us into signing a new loan estimate as a " remedy '' for the discrepancy. Additionally, after we expressed that we would walk away and were concerned about losing the earnest money- we were told Delmar could issue a financing denial letter. We have been told that could be fraudulent. This is all available on recording phone calls that you should have access to. 

The inspections are all pre-paid, and we do not wish to pay the XXXX HOA fee at closing. This would remove an additional {$730.00}. The owner 's title insurance should also be removed. 

As far as we understand, Delmar XXXX  is licensed to do business in the state of Pennsylvania. To us, that indicates that we should be receiving good faith and accurate estimates of the costs, which we have not received. We have already begun arranging our finances based on the closing disclosure we received on XX/XX/2022 ( which said it was final ). It seems unreasonable to expect us to come up with an additional {$6000.00} ( 10.50 % increase in cash to close ) 4 days before closing. We will walk away, but we have been told we will not receive my earnest money. We do not want to have to submit a complaint to the federal & state government but we may have to, considering how problematic this whole process has been. We have received no explanation beyond " This is just how it is- oops. ", " Oh I forgot to put it on the loan estimate/ closing disclosure '', ' '' They don't do it like this anywhere else in the country '', and " It was the computer/software fault ''. XXXX & I believe we have been, whether intentionally or not, taken advantage of as young, first-time homebuyers. 

The issue is not with the fees, but with the lack of disclosure on the part of Delmar. Where we believe we have not been treated with good faith is that there are three major costs omitted from every estimate and the first closing disclosure until four days before closing. Delmar XXXX  did not include transfer tax, lender 's title insurance, or any amount of taxes, leading to a massive underestimation of our costs to close.