Consumer complaint received 2025-03-13 00:00:00
Product: Mortgage — VA mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage — Application denials
Company: NAVY FEDERAL CREDIT UNION
State: NC

Complaint narrative:
I applied for a VA loan through Navy Federal on XX/XX/XXXX. At that time, I was informed who my loan officer would be. I reached out to my loan officer on XX/XX/XXXX, and she responded via email, stating that she would call me. However, I never received a call from her. Instead, I received a request to upload documents necessary for the loan to proceed. I uploaded all required documents on XX/XX/XXXX. Subsequently, I received an email from a loan processor informing me that my loan was being assigned to another processor. On XX/XX/XXXX, I received an email indicating that my approval package was ready for me to log in and review. During a telephone conversation with the processor around that date, I was instructed to pay for an appraisal and to arrange for a termite inspection, which I completed. During this time, I was also coordinating with the Title Department to ensure that the correct information was available for the title. On XX/XX/XXXX, I received an email stating that my approved appraisal was ready. On XX/XX/XXXX, I completed a Mortgage Loan Estimate Re-Disclosure. By XX/XX/XXXX, I was assigned yet another loan processor. On XX/XX/XXXX, I received a call from the loan processor, who informed me that my loan was not approved because I was not occupying the residence with my wife. I explained that my wife had not yet retired, but I had moved back into the residence full-time in XX/XX/XXXX. I provided documentation, including my water and electric bills, which showed my residence as the mailing address. I clarified that I had been using my wife 's address for mailing purposes. I was then told that it was a VA rule that both of us had to live there. I contacted the VA and was informed that this was incorrect ; only the member entitled to the benefit needed to reside there. Following their guidance, I submitted an appeal on XX/XX/XXXX. I was also advised to reapply for a conventional loan due to the supposed VA rule. Reason : I applied for a conventional loan on XX/XX/XXXX. I communicated with my new loan officer via email on the XXXX, and she confirmed that my appeal had been received and forwarded. I later received a response stating that my appeal was denied because my loan was not approved due to past due bills and other credit issues. I strongly disagreed with this explanation ; if that were the case, I should have been informed during underwriting, and my application should not have been approved. I then allowed the new loan to proceed, but it never made it past underwriting. They claimed my debt-to-income ratio was too high because my student loan was in forbearance, requiring them to calculate the repayment at 1 % of the loan amount. I explained that I had been on income-based payments prior to the forbearance. However, they informed me that they could not make any adjustments because that was the established rule. After receiving my second denial, I requested a refund for the appraisal and termite fees, but I was told that a refund was not possible. I believe that Navy Federal changed the rules regarding my loan and did not apply the correct standards concerning occupancy. If the denial was due to our credit, we should never have been instructed to proceed with an appraisal. I want my VA loan approved, as it should have been.

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with monetary relief