Consumer complaint received 2025-02-27 00:00:00
Product: Mortgage — FHA mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage — Application denials
Company: NAVY FEDERAL CREDIT UNION
State: TX

Complaint narrative:
Navy Federal Credit Union Discrimination in Mortgage Lending.

The Home Mortgage Disclosure Act XXXX requires lenders to collect, report, publicly disclose borrower demographic data that provides a model to guide reform. XXXX is enforced by Office of the Comptroller of the Currency, can impose administrative sanctions, civil money penalties, exposed for non-compliance. Based on this ruling, the complainant is seeking compensatory and punitive damages from NFCU in the amount of {$25000.00}. 

Consumer Financial Protection Bureau ruled against Navy Federal Credit Union for XXXX XXXX in mortgage lending. NFCU has XXXX million members. It conducted its own internal investigation and stated, we found no race-based decision making in our mortgage underwriting and that legitimate non-race factors had largely explained XXXX differences in approval rates. XXXX investigated and found that Navy Federal in 2022 approved more than 75 % XXXX borrowers while approving less than 50 % of XXXX borrowers who applied for the same type of loan according to Consumer Financial Protection Bureau data. Nearly XXXX percentage-point gap in Navy Federals approval rates was the widest of any of the XXXX lenders that originated the most mortgage loans in 2022. The disparity remained even after accounting for more than a dozen different variables available in public mortgage data. XXXX XXXXXXXX XXXX and XXXX XXXX, Navy Federal says external review finds non-race factors explained mortgage approval disparities, XXXX XX/XX/XXXX This complaint is filed for protection against disparate impact because of NFCU discriminatory and predatory lending practices : I was declined a mortgage because of my ethnicity, XXXX XXXX. ( Ref. Consumer Financial Protection Bureau ruling and letter addressed to NFCU XXXX, XXXX, XX/XX/XXXX and XXXX XXXX, XXXX NFCU mortgage processor ) NFCU failed to clearly explain terms in a simplified method to inform members that taking a cash advance would result in additional fees added to the monthly credit card balance and remain active until the credit card balance is paid in full. 

Consolidation loan with collateral was a XXXX XXXX with XXXX mileage. When the transmission went, the dealer wanted {$8000.00} to repair, the value of the car was under {$8000.00}. I decided not to get it repaired but to scrape it and I needed NFCU to release the title and the consolidation loan would be paid on time without collateral. They would not release the title and required me to take a {$4000.00} cash advance to pay down the consumer loan before releasing the title. ( Ref. to consolidation loan page ) In 2024 during the height of the inflationary impact, I applied to NFCU for a loan to consolidate the balance on the consumer loan and balance on credit card to lower my monthly payments and was denied. Paying off the balance of the credit card would free me from paying the additional cash advance monthly fee. NFCU financial practices have contributed to my inability to maintain financial stability and my inability to sustain the burden of debt that translated from a good credit rating into a poor credit rating. 

I have been a NFCU member since 2006, always paid on time, never late, and NFCU stated my credit score of XXXX. 
Mortgage Application Denied Around 2017, I applied for a mortgage from NFCU. My payment history to creditors was 100 % paid on time. NFCU declined my request for a mortgage. 
In 2017, I applied to another lender, XXXX XXXX XXXX, loan # XXXX and was approved for {$130000.00} and purchased the property at XXXX XXXX XXXX XXXX, Georgia. During my time living in this home, I was never late on any mortgage payments or other obligations. 
In 2021 the real estate market surged and I sold the XXXX XXXX XXXX XXXX property at a profit. I applied for a mortgage with NFCU. I deposited over {$50000.00} in my NFCU account. I still had a good credit score, and maintained 100 % on time payments. NFCU declined me for a mortgage.

During 2021 I did get approved for {$140000.00} mortgage with XXXX XXXX XXXX XXXX XXXX loan # XXXX and purchased XXXX XXXX XXXX, Texas for {$130000.00}. Dealing with XXXX was stressful requiring me to file a complaint against XXXX with the Department XXXX XXXX and XXXX XXXXXXXX. After XXXX year XXXX sold my mortgage to XXXX XXXX. From XXXX to the present time, mortgage payments have been made on time. 
NFCU Penalty for taking a cash advance I was not aware that taking a cash advance would be penalized with a monthly charge of {$80.00} over the term of the unpaid balance. The bank said the {$80.00} per month would continue until the full balance on the credit card is paid. The bank offered an increase on the credit card limit which I rejected because I wanted to pay off the current balance. This could be considered predatory lending practice that impacts people of XXXX greater and can such practices continue without recourse. 

NFCU XXXX XXXX I applied for and received a consumer loan and used my car as collateral. When the transmission on the 2016 vehicle went, the dealership quoted {$8000.00} to replace the transmission. This was more than the car was worth. I decided to scrap the car and asked for the return of the car title to give to the junk yard. The bank would not release the title until I put up {$4000.00} to be added onto the balance of the loan. 
I asked the bank if I could consolidate the balance on the consumer loan and the balance on the credit card to dismiss the extra {$80.00} charged monthly. I estimated the consolidated loan would lower my cash output each month. The bank declined my request. 
Due to banks discriminatory pattern and practice engage in conduct that unquestionably harms consumers along lines of race. 
During the current inflation, I have been unable to meet rising cost both in the economy and the increasing bank cost added to balances. I sent the bank a bonded promissory note XXXX to dismiss the consumer loan and XXXX to discharge the credit card debt. The bank has failed to process the payments, continues to ignore the payment, and has not returned the bonded promissory given for payment. 

Letter to NFCU XXXX : XX/XX/XXXX XXXX XXXX XXXX, XXXX Navy Federal Credit Union XXXX XXXX XXXX XXXX XXXX, VA XXXX Dear XXXX XXXX : For almost XXXX years, I have been a member of Navy Federal Credit Union. My husband served XXXX years in the Marine Corp and after his combat related death, I was so pleased to become a NFCU member. Over the years, I have not had an overdraft, been late on any payments and my credit rating with NFCU is around XXXX. 
Since around 2018, NFCU has not been customer friendly to me. 
Based on a history of good credit and never any late payments, NFCU recently has been more of a hindrance than helpful. For instance, on several occasions I requested a VA mortgage from NFCU and was denied. In 2021 XXXX sold my home in XXXX, deposited over {$50000.00} in my NFCU checking account and requested a mortgage from NFCU to buy a home in XXXX and was denied. 
I applied for and was approved for a NFCU consolidation loan and used my car title as equity. Eventually the auto transmission went out, and the engine was on its way out with other issues and over XXXX miles. I decided not to get the vehicle repaired at an estimate of {$8000.00} and the value of the car was under {$8000.00}. I decided to scrap the car and needed the title. In order for the title to be released, I was asked to get a cash advance for almost {$4000.00} from my NFCU credit card and apply it to the consumer loan. After much haggling with NFCU they released the title so that I could have the inoperable auto towed and junked. 
I decided to buy a used car, {$25000.00} and requested a NFCU car loan and was denied. Later, NFCU was promoting refinance of auto loan balance at low interest rate, I requested that assistance and was denied. 
Recently, I applied for a home equity loan from NFCU on my current property. I was initially approved for {$22000.00} with a XXXX  mortgage on the home. I told your customer representative that the money would pay off my NFCU consumer loan balance of under {$10000.00} pay off a {$5000.00} balance on XXXX XXXX credit card and the remainder would paydown the balance on NFCU credit card. The loan application made it to the underwriter where it is showed on my statement as in progress. After a few weeks passed and no decision, I called and discovered it was denied. These funds would have decreased my monthly payout by {$600.00}.

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