Consumer complaint received 2025-04-28 00:00:00
Product: Mortgage — Conventional home mortgage
Issue: Closing on a mortgage — Changes in loan terms during or after closing
Company: FIRST UNITED BANK AND TRUST COMPANY
State: TX

Complaint narrative:
Introduction and Background : In XX/XX/XXXX, I entered into a mortgage loan transaction with First United Bank.

Following concerns regarding the origination, funding source, and chain of title associated with the loan, I issued a formal written request for validation and disclosure to First United Bank in XX/XX/XXXX. 
XXXX XXXX, CEO of First United Bank, responded via letter dated XX/XX/XXXX. 
The contents of XXXX XXXX response admit to critical facts which reveal potential violations of federal law and establish that First United Bank has failed to meet its burden of proof regarding the lawful origination, funding, and servicing of this mortgage. 
________________________________________ XXXX XXXX XXXX : Admission XXXX : The Bank monetized the promissory note to create the funds used to originate the loan, while simultaneously placing a lien against the property. 
Admission XXXX : The Bank sold the loan to the XXXX XXXX XXXX XXXX FHA ) after closing but retained servicing rights. 
Admission XXXX : The Bank refused to disclose its internal funding processes, claiming they are " proprietary, '' and asserted no obligation to disclose the funding mechanism to the borrower. 
________________________________________ Application of Law to Admissions : I. Monetization of Promissory Note Without Lawful Consideration Under XXXX XXXX, an instrument is enforceable only if issued for value. 
Monetization of a promissory note without advancing pre-existing lawful money violates this requirement and constitutes a failure of consideration. 
Furthermore, under XXXX XXXX. XXXX, only lawful money ( United States coins or notes redeemable in lawful money ) may be used to extinguish debts. 
First United Bank 's admission of monetization without proof of pre-existing lawful tender establishes a prima facie failure of lawful consideration. 
Conclusion : First United failed to provide lawful value at origination, undermining the validity of the debt obligation and lien. 
________________________________________ XXXX. Separation of Note and Deed of Trust Violates Chain of Title Requirements In XXXX XXXX XXXX, XXXX XXXX XXXX ( XXXX ), the U.S. Supreme Court held that " the note and mortgage are inseparable, '' and an assignment of the note must be accompanied by the mortgage ( deed of trust ) for enforcement. 
Additionally, under XXXX XXXX ( g ), an assignment of the note carries the security instrument automatically. 
XXXX XXXX admitted that the loan was sold to FHA but failed to confirm the simultaneous transfer of the deed of trust. 
This raises a chain of title defect, resulting in a potential loss of standing to enforce the lien. 
Conclusion : First United failed to demonstrate compliance with property law, rendering the security interest questionable or voidable. 
________________________________________ XXXX. Refusal to Disclose Funding Mechanism Violates TILA Disclosure Requirements Under TILA ( XXXXXXXX XXXX XXXXXXXX ( a ) ), lenders are required to fully disclose the identity of the creditor, the amount financed, and the true nature of the credit extended. 
Hiding the monetization of the note and immediate sale to FHA as proprietary constitutes a material omission. 
Material omissions that would affect a borrowers understanding of their obligations violate the Truth in Lending Act and constitute an unfair and deceptive practice under CFPB jurisdiction ( XXXX XXXX ). 
Conclusion : First United unlawfully concealed material information affecting borrower rights, violating federal disclosure statutes. 
________________________________________ XXXX. Failure to Validate Debt and Chain of Title Under RESPA ( XXXX XXXX. XXXX ) and FDCPA ( XXXX XXXX. XXXX ), consumers have a right to request validation of debts and servicing authority. 
First United provided no documentary proof of : o Funding source, o Chain of title, o Lawful servicing authority post-sale to FHA. 
Mere conclusory statements of compliance are insufficient under federal law ; documentary proof is required upon formal request. 
Conclusion : First United failed to validate critical elements of the loan transaction, further undermining its standing and exposing itself to statutory penalties.

Company response to consumer: Closed with explanation