Consumer complaint received 2024-10-08 00:00:00
Product: Mortgage — VA mortgage
Issue: Closing on a mortgage — Closing disclosure or other related disclosures
Company: CARDINAL FINANCIAL COMPANY, LIMITED PARTNERSHIP
State: TX

Complaint narrative:
Cardinal Financial is listing rate lock charges as discount/points to hide what theyre charging for rate lock in charges. 

We were charged {$31000.00} for a XXXX rate lock on XX/XX/XXXX, they list this as discount points but emails and paperwork claim that it is nothing more than rate lock charges. They appear to be deceptive with how they word the actual charge to avoid the VA from scrutinizing the veterans paperwork. 

We have asked for a breakdown of what we paid for our 360 day rate lock but have not been provided anything. Once the 360 day rate lock expired on XX/XX/XXXX we were charged a rate of 0.02 % of our loan which totals {$190.00} a day. If they are charging XXXX {$190.00} a day for rate lock extensions how would they pass of a XXXX rate lock at no charge and XXXX can not answer that question. Emails from an employee with a title of XXXX XXXX XXXX XXXX XXXX, states " On the points, they only have to do with the rate lock. For instance..a XXXX lock is the least expensive. A XXXX lock is slightly higher in rate or discount ( points ) cost. XXXX, XXXX, XXXX, XXXX, etc... this is a XXXX rate lock and there is no rate available to lock that far out without the cost to the extended lock being higher than a normal 30 day rate lock. 
There is a float down option..we can float you down, at no cost, XXXX time and it needs to be within 45 days of the projected closing date. '' And again in a separate email he states : " The lock fee was paid as discount cost/points, and it was on a projected ramp up from first draw to final loan amount. The {$31000.00} / 360 days = {$86.00} per day. '' The VA rules state a veteran can not be charged rate lock fees whether rate lock in charges or rate lock extension fees but they can be charged as long as they fall under the 1 % flat fee. For our loan of {$990000.00}, the 1 % totals {$9900.00}. They did not supervise more than 50 % of our loan at any point so the 2 % additional charge does not apply. Cardinal Financial only issued draws based on completion percentage of the project and at the request of the builder, at no point did they get involved more than releasing draws per the schedule. 

When rate lock extensions were forced on us, we were never issued a " change of Circumstance loan estimate '' to indicate a change in closing costs which would have included the rate lock extensions we paid. We were never notified rate lock extensions were being charged to us starting on XX/XX/XXXX at the rate of {$190.00} a day until I reached out to the draw coordinator to see what we needed to do because the build wasnt going to be finished by the contract date of XX/XX/XXXX. At that point we were told rate lock extensions were already accumulating without our request to do so, which goes against Cardinal policy where the customer is supposed to request rate lock extensions and Cardinal has the option to accept or decline the request. We were never given that option. Cardinal policy also states it can only be extended for a maximum of 120 days which Cardinal exceeded to 137 days and again without the customers consent to do so.

It is our belief that Cardinal has violated the Deceptive Trade Practice Act hiding the 360 day rate lock real costs and by forced phantom rate lock extension charges that were never disclosed and holding the modification of construction to permanent financing mortgage loan hostage unless we paid those undisclosed fees. The final paperwork submitted to the VA also failed to include the XXXX rate lock extensions we paid on XX/XX/XXXX which is deceptive when reporting all cost associated with our loan to the VA. 

We were also told we had a XXXX time float down option but before modification we asked about it and we were told it doesnt exist even with written proof.

Company response to consumer: Closed with explanation