Consumer complaint received 2023-06-23
Product: Mortgage — Other type of mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage — 
Company: KEYCORP (CO)

OXX/XX/XXXX, my wife and I applied for conditional mortgage approval for a XXXX mortgage. We had evaluated three companies ( and several others in less depth ) and ultimately selected KeyBank ( Keybank National Association, XXXX XXXX XXXX, XX/XX/XXXX on letterhead ). At the time of our application, the Keybank interest rates were competitive with the market rate of other lenders. We were quoted, at that time, a rate of 6.375 %. Our home is a new build that will not close until the fall, and we applied for the conditional approval knowing that the rate would float. The conditional application fee was {$500.00}. XXXX  Our mortgage loan officer is XXXX XXXX of XXXX Colorado. She was a pleasure to work with. I contacted XXXX on XX/XX/2023 to inquire as to current rates at that time. She eventually responded on XX/XX/XXXX and asked to set up a phone call. We spoke by phone on XX/XX/. At that time, she informed me that Keybank was not closing its XXXX loan program but decided ( for what I presume are liquidity reasons ) to substantially raise market rates above typical market rates at the time. This made the loan and lender substantially less appealing, as the new rate would be at least 7.5 %, substantially above the typical market rate and other lenders we had followed up with. She indicated that she knew that this was disappointing and understood that we would likely not pursue this loan. She indicated that she could inquire as to whether our {$500.00} fee could be refunded. XXXX On XX/XX/XXXX, I emailed XXXX know that we were indeed proceeding with another lender given the change in Keybanks interest rates. I requested that we be refunded the {$500.00}, as our change was a result in their dramatic raising of the interest rate on the part of Keybank. XXXX On XX/XX/XXXX, XXXX emailed me that the {$500.00} would not be refunded. She indicated that her management would not refund the fee unless we fell out of contract due to appraisal, inspection, or lack of qualification for the loan. I emailed her back that day ( XX/XX/XXXX ) to express my concern that the interaction with Keybank, intentional or not, felt like a misleading sales tactic or so-called bait and switch. I had paid {$500.00} with the understanding that their rates were in keeping with the market rate and competitive with other lenders. After I gave them the money, they dramatically raised the rate above typical market. XXXX  On XX/XX/XXXX, I received a letter from Keybank that I had requested to withdraw the loan application and that the loan application was cancelled. XXXX On XX/XX/XXXX, I followed up by email with XXXX, as I had not heard a response. On XX/XX/XXXX, she contacted me that the refund was again declined, as Keybank maintains the right to change pricing at any moment when a rate floats. She indicated that her manager involved was XXXX XXXX ( Colorado Home Lending Market Leader for Keybank ) and that he had also contacted other higher management not otherwise specified. XXXX To recap, my concern is that this interaction was effectively a misleading sales tactic or bait and switch. I applied for conditional approval with Keybank due to a good working relationship with XXXX and because their rates offered were in keeping with other lenders. After taking my {$500.00}, Keybank decided to raise its XXXX  mortgage loan rates to be substantially above that of other lenders. Their refusal to remedy the situation is ethically disappointing and challenging to understand from a public relations perspective. To remedy the situation, I would like my money to be refunded.