Consumer complaint received 2025-08-05 00:00:00
Product: Debt collection — Mortgage debt
Issue: False statements or representation — Attempted to collect wrong amount
Company: BANNER CORPORATION
State: OR

Complaint narrative:
In XX/XX/XXXX, we obtained a construction loan from Banner Bank to build a residence on our property. During construction, significant problems arose with the builder, XXXX, including deviations from the permitted plans and progress failures that resulted in a work stoppage until deficiencies were corrected. XXXX stated it would override the City building inspector ; when we refused, XXXX recorded a lien, initiated arbitration, and ultimately obtained a judgment against us. Our property is now burdened by ( XXXX ) a City non-compliance notice, ( XXXX ) a lien, and ( XXXX ) a substandard, incomplete structure. 

The construction agreement required inspections to confirm that work was properly completed before funds were disbursed. Banner Bank failed to adhere to this requirement. Their own inspection report confirmed the concrete work was incomplete, yet they nevertheless released loan funds to XXXX, including payment for a large concrete slab that was never poured. 

We repeatedly alerted Banner Bank to the contractors misconduct and requested assistance, but our concerns were ignored. Receiving no help from the Bank and facing imminent litigation, we retained legal counsel ; however, due to our inexperience, we misjudged his competence, and his mishandling of the matter led to an unfavorable arbitration outcome. Despite knowing we were represented by counsel, Banner Bank continued to contact us directly for legal updates and to insist we execute loan modification documents. 

More than XXXX years after signing the construction contract, we have only a partially built basement foundation, constructed below standard, now deteriorating due to crumbling rock and rusting exposed rebar. We are bound to a XXXX loan on what was once unencumbered property, unable to build, sell, or use it, while Banner Bank continues to profit from our monthly payments despite its duty to intervene. More than XXXX years after signing the construction contract, we are left with only a partially built basement foundationconstructed below standard and now deteriorating from crumbling rock and rusting exposed rebar. 

We remain bound to a XXXX  year loan on what was once unencumbered property, unable to build, sell, or use it. Our continued payments provide no benefit to us ; yet we have honored our obligations, doing everything possible to prevent foreclosure and to remove the unjust encumbrances on our property, while Banner Bank continues to profit from our monthly payments despite its duty to intervene. 

Banner Bank was contractually obligated to indemnify and hold us harmless under the XX/XX/XXXX Note, which states : Banner Bank hereby indemnifies and holds Borrowers harmless from any liability, including reasonable attorneys ' fees, for any third-party claims, suits, actions, damages or demands for money which may arise as a result of the original Note or Borrowers signing of this Agreement. 

The ongoing financial burden and loss of property use have caused severe and irreparable harm. Yet, as before, our latest demand for relief from Banner Bank sent on XX/XX/XXXX has been ignored. Banner Banks negligent disbursement of funds, failure to enforce inspection requirements, and refusal to honor its indemnification obligation have directly caused our losses. A summary timeline follows, with supporting documentation attached : XXXX. Custom Construction Summary XXXX. Contractors Summary of Custom Construction Loan XXXX. Date : XX/XX/XXXX : Banner Bank will not release ( construction ) funds until after inspection XXXX. Date : XX/XX/XXXX First Draw {$11000.00} admin fee paid to XXXX  XXXX. Date : XX/XX/XXXX : XXXX has yet to begin construction, concerned about being charged many thousands more by the contractor. 
XXXX. Date : XX/XX/XXXX : XXXX  : Are you still making progress? We need to send an inspector XXXX. Date : XX/XX/XXXX : XXXX : You are past due for an inspection. Inspections required every XXXX  days. 
XXXX. Date : XX/XX/XXXX : Once the foundation is poured, XXXX says the foundation endorsement will be ordered. 
XXXX. Date : XX/XX/XXXX : XXXX  is told foundation walls are complete. The foundation slab is to be poured the XXXX or XXXX week of XX/XX/XXXX. Date : XX/XX/XXXX Banner Bank orders foundation inspection. Draws are to be processed when the inspection reports are received. 
XXXX. Date : XX/XX/XXXX XXXX  is paid in advance for all the concrete for the entire build. XXXX yards is allotted and paid for {$35000.00} XXXX. Date : XX/XX/XXXX : We ask loan extension questions and looking into XXXX contract XXXX. Date : XX/XX/XXXX : XXXX  extension response and importance of the home built correctly to plans and within the budget XXXX. Date XX/XX/XXXX tell XXXX  XXXX sent a $ XXXX overage bill to us for concrete XXXX. Date XX/XX/XXXX : frustrated with XXXX that it has been a year, we have no schedule, and no slab has been poured yet XXXX. Date : XX/XX/XXXX : We inquire about the possibility of a new builder XXXX. Date : XX/XX/XXXX XXXX says switching builders is allowed XXXX. Date : XX/XX/XXXX We tell XXXX our concern that they were paid for all the concrete they expected the project needs : XXXX yards. XXXX were already poured and there is no slab. 
XXXX. Date : XX/XX/XXXX City Inspection failed and we say XXXX needs to correct the problems XXXX. Inspectors Report showing XX/XX/XXXX failure XXXX. Date : XX/XX/XXXX : Email to city inspector summarizing our meeting. He confirms incorrectly built. 
XXXX. XXXX asks engineer to approve the current state of the backfill w/ attached photo a. XXXX text to override the [ city ] inspector b. Engineer approves. Photo attached XXXX. Date XX/XX/XXXX : We tell XXXX critical issues must be addressed- the concrete does follow plans and concrete allotment concerns. Photos attacheed XXXX. Date : XX/XX/XXXX : XXXX  says they are raising the slab level but we insist on corrections. We can not and will not move forward until fixed. 
XXXX. Date : XX/XX/XXXX : Email to draws dept re : urgent issues, needing an attorney XXXX. Date : XX/XX/XXXX Email to loan officer : can not get a hold of draws dep. We need immediate assistance. 
XXXX. Date : XX/XX/XXXX Email to XXXX : " We have some serious issues with our builder and may need to speak to an attorney '' and need to talk to someone as soon as possible XXXX. Date XX/XX/XXXX : to XXXX : paid for the foundation was an upfront draw for all the concrete, including the slab still not poured. Pictures attached. 
XXXX. Date : XX/XX/XXXX : XXXX  has inspection report for draw. 
XXXX. Date : XX/XX/XXXX The structure is massively overbuilt and not finished. The concrete slab is still un-poured and XXXX is demanding an additional {$11000.00} from us. XXXX threatens to file a lien. 
a. Invoice and an unsigned addendum attached. 
XXXX. XXXX site visit says slab area is prepped for the slab. Picture attached. 
XXXX. Windows not approved to be delivered. and damaged w pictures attached a. XXXX  says they will pick up the windows XXXX. Date : XX/XX/XXXX XXXX  tells XXXX  they intend to file a lien a. Attached invoices for {$11000.00} for concrete and XXXX  draw {$5500.00} for 40 % of plumbing XXXX. Date : XX/XX/XXXX XXXX  tells XXXX  lien is being processed. 
a. Updated XXXX  draw to include windows. Now draw request for {$15000.00} and XXXX invoice for {$11000.00}. 
XXXX. Lien filed XX/XX/XXXX for {$26000.00} XXXX. Date : XX/XX/XXXX We tell XXXX the lien is untimely and claims $ not owed XXXX. Date : XX/XX/XXXX XXXX  says we arent grading the basement to allow them to pour XXXX. Date : XX/XX/XXXX We refuse to allow them to continue without fixing errors XXXX. Date : XX/XX/XXXX XXXX  asks us how we intend to handle the situation with the lien and what we plan to do to complete our home. 
XXXX. Date : XX/XX/XXXX : We tell XXXX  that we would like to refinance, and ask XXXX  for resources to assist us during the legal issues XXXX. Date : XX/XX/XXXX Banner Bank says we can not refinance, and asks for update on lien situation and timeline for when/how this will be resolved. 
XXXX. Date : XX/XX/XXXX : We respond that we had to hire a lawyer and will arbitrate. 
XXXX. Date : XX/XX/XXXX : Our Attorney will now communicate with XXXX and loan officer. ( Included XX/XX/XXXX, XXXX emails prompting the convo. ) XXXX. Date : XX/XX/XXXX : Banner Bank asks for update on arbitration. 
XXXX. Date : XX/XX/XXXX We tell them it is scheduled Feb 21-23, 2023. 
XXXX. Date : XX/XX/XXXX Banner Bank says they must convert the construction loan to a lot loan XXXX. Date : XX/XX/XXXX : Docs sent, must sign and return notarized. 
XXXX. Date : XX/XX/XXXX XXXX  says docs were sent XX/XX/XXXX and we must sign. 
XXXX. Date : XX/XX/XXXX : XXXX resent docs as urgent, as we are behind now. 
XXXX. Loan note mod agreement dated XX/XX/XXXX is signed and recorded on XX/XX/XXXX.

Company response to consumer: Closed with explanation