Consumer complaint received 2024-01-14 00:00:00
Product: Mortgage — Conventional home mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage — Application denials
Company: NAVY FEDERAL CREDIT UNION
State: VA

Complaint narrative:
I applied for a mortgage with Navy Federal Credit Union on XX/XX/XXXX and received an adverse action notice. The 2 main issues that I have with this denial is potential securities fraud due to the pooling and securitization of my application along with using clearing firms to process receivables which come from applications, which NFCU has stated that it does during its regular course of business in it's XXXX XXXX Report, and discrimination against my XXXX XXXX which is prohibited. 

I wish to bring to your attention that adverse action against a consumer, as per a denial, is in violation of the Equal Credit Opportunity Act, which is codified in 15 USC 1691 ( c ). This act also establishes civil liability under 15 USC 1692 ( k ). The documentation of adverse action, in this case, would serve as evidence of potential discrimination, holding Navy Federal Credit Union accountable for possible violations of 15 USC 1691.

According to 12 CFR 1002.7 - Rules concerning extensions of credit, a creditor is explicitly prohibited from refusing to grant an individual account to a creditworthy applicant on the basis of various factors, including XXXX, marital status, race, XXXX, religion, national origin, or any other prohibited basis. 

A prohibited basis is defined as : race, XXXX, religion, national origin, XXXX, marital status, or age ( provided that the applicant has the capacity to enter into a binding contract ) ; the fact that all or part of the applicant 's income derives from any public assistance program ; or the fact that the applicant has in good faith exercised any right under the Consumer Credit Protection Act or any state law upon which an exemption has been granted by the Bureau. Navy Federal Credit Union 's denial may be perceived as a breach of these regulatory provisions. I believe that Navy Federal Credit Union would be in violation of 15 USC 1642, USC 1681 ( m ), and 12 CFR 100XXXX because my application was exercised in good faith in accordance with my rights under the Consumer Credit Protection Act, but for credit to not be issued due to discrimination against a score issued by a reporting agency that would be discrimination. 

Please note that 12 CFR 1002.9 ( b ) ( 1 ) states that : ( 2 ) Statement of specific reasons. The statement of reasons for adverse action required by paragraph ( a ) ( 2 ) ( i ) of this section must be specific and indicate the principal reason ( XXXX ) for the adverse action. Statements that the adverse action was based on the creditor 's internal standards or policies or that the applicant, joint applicant, or similar party failed to achieve a qualifying score on the creditor 's credit scoring system are insufficient. 

Additionally, the use of my social security number in the application process without receiving any benefit raises concerns of potential fraudulent activity ( unauthorized user RE : 15 USC 1682 ( ( p ) ) on behalf of Navy Federal Credit Union.

In light of Navy Federal Credit Union 's 2022 Annual Report, where the institution outlines its standard business operations, particularly in the securitization of mortgages during origination and the transfer of residential mortgage loans, I am seeking your assistance in gaining further clarification on the denial. 

Understanding the intricacies of securitization and sales transactions with continuing involvement, as detailed in the Annual Report, prompts me to address concerns about the potential securitization of my mortgage application without the corresponding issuance of credit. The trust instilled in the residential mortgage loan application process, where future mortgage sales are considered assets, could be compromised by securitizing my application without providing credit, which Navy Federal has stated is part of its regular course of business.

Additionally, the use of my social security number in the application process without receiving any benefit raises concerns of potential fraudulent activity, constituting unauthorized use as per 15 USC 1682 ( p ). This, coupled with the securitization process, brings into question the integrity of NFCU 's residential mortgage loan application system. 

Given Navy Federal 's ability to securitize my application and utilize my social security number, I believe it's crucial to address these concerns promptly. Without the issuance of credit to compensate me for my participation in this transaction, valuable consideration has not been given, and I request the return of my credit application to ensure it is not securitized or valuable consideration to be given.

In light of these considerations, I am formally revoking any authorization for the use of my credit card ( also known in this case as a social security number ) for any purposes related to this application without the exchange of valuable consideration. Consequently, I am demanding the immediate return of my denied application and the removal of all associated information from Navy Federal Credit Union 's records if credit is not to be issued. I also am requesting the removal of this inquiry from my credit report as it represents a one-sided transaction where Navy Federal Credit Union received access to my credit while I received nothing. All records of this transaction should be removed if credit is not issued.

If Navy Federal fails to make any reasonable procedures to resolve this matter and compensate me for the use of my credit card, I will be forced to make Navy Federal Credit Union criminally and civilly liable for all actual damages pursuant to 15 USC 1681 ( n ) and 15 USC 1681 ( o ). I will also be be forced to pursue potential liability due to discrimination. Navy Federal has stated, " We also obtained your credit score from this consumer reporting agency, XXXX, and used it in making our credit decision. '' This statement is in direct contradiction to this statement 12 CFR 1002.9 ( b ) ( 2 ) " Statements that the adverse action was based on the creditor 's internal standards or policies or that the applicant, joint applicant, or similar party failed to achieve a qualifying score on the creditor 's credit scoring system are insufficient. '' XXXX has directly violated my rights by discriminating against my credit score and by not returning my application to me to ensure that it is not securitized.

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