Consumer complaint received 2025-09-17 00:00:00
Product: Mortgage — VA mortgage
Issue: Closing on a mortgage — Trying to communicate with the company to fix an issue with the loan closing
Company: HIGHLANDS RESIDENTIAL MORTGAGE
State: NC

Complaint narrative:
Summary of Issue I am a XXXX, severely injured XXXX XXXX who was transferred to the XXXX XXXX XXXX during recovery. I applied for a VAbacked mortgage with Highlands Residential Mortgage. Their automated underwriting system ( AUS ) returned Approve/Eligible findings on XXXX separate occasions XXXX XXXX. Highlands Residential Mortgage issued a conditional approval and signed disclosures reflecting those approvals. In reliance, I entered into a purchase contract, deposited {$6500.00} earnest money with the sellers escrow agent, and paid {$800.00} for a home inspection. 
Violations of Federal Law * Regulation X / RESPA ( 12 C.F.R. 1024.36 ) : On XXXX separate occasions, beginning with my XX/XX/year> memoranda, I submitted formal written requests for documents related to my loan file. Highlands failed to acknowledge within 5 business days and has never provided the requested documents or any written explanation within 30 business days. 
* ECOA / Regulation B ( 12 C.F.R. 1002.9 ) : Highlands did not issue a proper adverse action notice when they denied or reclassified my loan. 
* Fair Housing Act ( 42 U.S.C. 3601 et seq. ) : Highlands failed to provide a reasonable accommodation for my XXXX and retaliated after I raised compliance concerns. 
* VA Lenders Handbook / 38 C.F.R. : Highlands ignored three AUS Approve/Eligible findings, and their VA underwriter manually overrode each one. They then denied my ability to use my military pension and VA XXXX compensation as qualifying income, despite VA rules explicitly recognizing these sources as stable and reliable. This is a misuse of VA automatic authority. 
* UDAAP ( 12 U.S.C. 5531, 5536 ) : Highlands engaged in unfair and deceptive practices by misrepresenting the loan authority type, failing to disclose material facts, and retaliating against me for asserting my rights. 
Retaliation and Delay Tactics After I put Highlands on notice of these violations, their Chief Compliance Officer attempted to reframe my loan as prior approval on XX/XX/year>. Highlands then delayed and extended timelines, threatening my contract deadlines and effectively forcing me to seek financing elsewhere. After I left, they attempted to spin the narrative as if it was my choice. This was not true their delay tactics engineered my exit. 
Detrimental Reliance & Harm Because I relied on Highlands Residential Mortgages AUS findings and disclosures, I incurred direct financial losses ( inspection costs and other wasted expenses ) and risked my familys housing stability. Most significantly, Highlands Residential Mortgages misconduct caused me to lose the ability to secure a 5.4 % VA interest rate. My new loan is at 5.9 % on a {$740000.00} home, increasing my monthly payment by approximately {$230.00} and costing me more than {$84000.00} over the life of the loan. 
As a combatwounded veteran with severe CPTSD, the stress of losing this opportunity and being forced into uncertainty further compounded the harm to me and my family. 
Validation by Subsequent Lender A subsequent lender obtained the same XXXX Approve/Eligible findings, properly counting both my spouses pay and my pension/disability income. This proves Highlands denial and delay were not about my creditworthiness, but about retaliation, misrepresentation, and governance failure. 
Oversight Already Engaged * The VA XXXX XXXX XXXX has an active complaint under investigation. 
* XXXX XXXX XXXX office is aware of this matter and prepared to escalate if Highlands continues to stonewall. 
* A Board Member of the XXXX XXXX XXXX for the XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX is also aware and monitoring this case. 
Pattern and Governance Failure This is not an isolated error. XXXX XXXX XXXX XXXX and XXXX were put on notice and failed to act. Their refusal to provide documents, repeated overrides of XXXX approvals, denial of veteran income sources, and retaliation against a combatwounded veteran demonstrate a pattern and practice of noncompliance and a governance breakdown that threatens other VA borrowers.

Company response to consumer: Closed with explanation