Consumer complaint received 2016-08-09
Product: Mortgage — Conventional fixed mortgage
Issue: Credit decision / Underwriting — 
Company: NAVY FEDERAL CREDIT UNION (CO)

I bought my current house using Navy Federal Credit Union ( NFCU ) in XX/XX/XXXX using what was called a Veteran 's choice loan. It offered the same benefits of a VA loan, but with no origination fees and less cost. I later added a XXXX mortgage to pay off some other debts. I was only behind twice on payments, once while getting a divorce and once after becoming unable to work and waiting for the VA to grant my XXXX. I am a XXXX Veteran now. I drastically need and have needed to do a refinance, both to lower my payments and interest, but to cash out some equity. My wife has been having XXXX since XX/XX/XXXX and I needed some funds to pay for her medical bills. I first talked to a loan officer at NFCU by contacting him through the NFCU website. He told me that I would be unable to use a VA Loan until XX/XX/XXXX. The reason is that although I was in contact with NFCU while behind on my mortgage XX/XX/XXXX, and they said they would give me a two more weeks to pay my past due, they turned my house over for foreclosure. I had already told them I had been awarded XXXX and would get backpay to cover my past due, but had not gotten the deposit yet. By doing this, I had to pay their law firm a {$500.00} fee. This foreclosure action, although I settled the past due within 3 days of getting turned over for foreclosure, now prevents me from getting a VA Loan until XX/XX/XXXX. Then I tried to do a HARP loan through XXXX. I ca n't do a HARP because when Navy Federal sold my loan to XXXX XXXX, they were required to put credit enhancing insurance on the loan. I ca n't seem to get anywhere with either place to drop this insurance, but ca n't get a HARP loan until it is dropped. Then, I called NFCU to check on other options as a last resort besides waiting until XX/XX/XXXX. I filled out a application on the phone for a 3 year ARM and was pre-approved with after a credit check for the deal, albeit with a slightly higher rate and fees than I wanted. This would at least buy time to get past the XX/XX/XXXX window of opportunity and get a minimal amount of cash out for my wife 's medical expenses. They told me a loan officer would be in touch very shortly. After waiting a few days and then over the weekend, I called the customer service number. I was told by that person, I would be contacted shortly by the loan officer. I could tell by the tone that something was wrong. The loan officer called. I do n't remember her name, but she called from XXXX, Florida. She said my loan was turned down because of my past bankruptcy which is well over 5 years old. I then called customer service again and the gentleman I talked to was very rude and actually told me that NFCU would never lend me money again because of my bankruptcy and involved a write-off of a vehicle loan and that my income , XXXX by the VA was an issue. They also took my last {$25.00} dollars the previous week for a credit report. They told me I qualified on the phone for the ARM and then denied me because of information they knew at the time of application, which was my bankruptcy and VA XXXX. This seems like a violation of the fair lending act, possibly the XXXX and is surely unethical and bad treatment of a person that was XXXX serving my country. I think it is shameful the way that they treated and treat me, based on the fact that their base clientele is XXXX XXXX Personnel and their families.