Consumer complaint received 2021-04-09 00:00:00
Product: Mortgage — Conventional home mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage — 
Company: NAVY FEDERAL CREDIT UNION
State: AL

Complaint narrative:
I first put in an application with Navy Federal Credit Union on XX/XX/XXXX. XXXX. My credit was pulled and I was issued a denial within 72 hours. Following this I appealed the denial and presented additional documentation supporting the use of $ 0 monthly payment for my student loans as per XXXX XXXX guidelines XXXX Which NFCU must abide by for conventional loans ). I was then advised on XX/XX/XXXX that this did not change the outcome of the denial. I then escalated the issue to upper management in underwriting, hoping they would be able to review it accurately and abide by XXXX XXXX guidelines. I was informed on XX/XX/XXXX, they unless there was new documentation, the denial could not be overturned. 

I had advised management that I provided all documents from XXXX, and that they met the XXXX guidelines for accepting income based repayment plans ( Which I will copy below directly from XXXX XXXX 's selling guide ) If a monthly student loan payment is provided on the credit report, the lender may use that amount for qualifying purposes. If the credit report does not reflect the correct monthly payment, the lender may use the monthly payment that is on the student loan documentation ( the most recent student loan statement ) to qualify the borrower.

If the credit report does not provide a monthly payment for the student loan, or if the credit report shows {$0.00} as the monthly payment, the lender must determine the qualifying monthly payment using one of the options below.

If the borrower is on an income-driven payment plan, the lender may obtain student loan documentation to verify the actual monthly payment is {$0.00}. The lender may then qualify the borrower with a {$0.00} payment.

For deferred loans or loans in forbearance, the lender may calculate a payment equal to 1 % of the outstanding student loan balance ( even if this amount is lower than the actual fully amortizing payment ), or a fully amortizing payment using the documented loan repayment terms.

Based on these guidelines my income based repayment plan with a XXXX XXXX monthly payment is acceptable to use as long as it is not in forbearance. I provided documentation showing it was not. NFCU attempted to state that because I have to recertify the plan every year that it was unacceptable. However, all income based repayment plans must be recertified every single year per federal student loan servicer requirements. XXXX XXXX makes no mention that this is a factor in determining approval of payment amounts for income based repayment plans. Nor does it state the payments must extend beyond 12 months. As long as I recertify every year, this document is considered acceptable for qualification. 

XXXX XXXX has acted in a discriminatory fashion by denying me a mortgage loan using excessive requirement above the established XXXX guidelines. Excessive guidelines go against the standards set forth by the CFPB to protect borrowers from such actions. Furthermore, I have already verified with both XXXX XXXX, XXXX, as well as a separate lender, that the documentation is sufficient to meet the XXXX guideline for use of a {$0.00} payment in my liabilities. 

Therefore I am requesting this to be addressed and for my loan to be approved and with reparations for the hardship this stress has caused my family, during a time that should be considered momentous. NFCU has created this hardship through excessive use of their underwriting department, without properly following established lender guidelines, and are therefore creating unfair treatment of student loan borrowers.

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