Consumer complaint received 2018-10-19 00:00:00
Product: Mortgage — FHA mortgage
Issue: Closing on a mortgage — 
Company: PRIMELENDING, A PLAINSCAPITAL COMPANY
State: FL

Complaint narrative:
XXXX XXXX XXXX XXXX Dear Sir/Madame : Please be advised that the above-referenced borrowers in connection with a financial transaction that occurred on the above referenced date. Based upon information received from our client, an expert mortgage audit report, and our research of the property records, the filings with the UNITED STATES Securities and Exchange Commission and interviews with various mortgage brokers, lenders, appraisers, title agents, and closing agents, we believe there are claims against you and your company for negligence, breach of contract, and breach of fiduciary duty, along with other claims in law and equity which total more in financial damages than the clients equity ( down payment ), costs of closing, all points and interest paid to date plus the par value of the subject mortgage note ( s ).

This is a substantial claim that may exceed the policy limits on any and all insurance policies issued that cover the risks in this claim.

Please forward a copy of this letter to any company that has issued a policy of insurance covering errors, omissions, negligence or any other guarantee or indemnification relative to the above-referenced loan closing. Failure to notify your insurance carrier may result in denial of coverage or denial of the duty to defend.

The above-referenced loan closing involved conflicting documentation and failure to disclose the existence of a Pooling and Service Agreement and Assignment and Assumption Agreement that predated the loan closing and provided for fees, profits and payments that were never intended to be disclosed to the borrower and that were withheld from the borrower before, during and after the subject loan closing. It was not until exhaustive research was performed that the true facts are emerging, and which have caused our client to express an immediate need and desire to rescind the alleged subject loan transaction.

Based upon conversations with our client and interviews with people who have knowledge of the practices and policies of the parties to this transaction, it is apparent that, contrary to federal and state law, you have participated in an extended pattern of conduct to further, foster, allow and promote an interstate conspiracy to deceive and defraud persons targeted as prospective borrowers in entire geographic regions of the the United States including but not limited to our client, and were further negligent in your supervision of your officers, directors, agents, affiliates, vendors and employees resulting in substantial financial and other injuries to our client.

Further based upon public filings, it appears that you, your insurance carriers, your agents, servants, vendors and employees must have known all or enough of the true facts to know that our client was not receiving the guidance, protection, due diligence or information to which our client was entitled and had our client been apprised of the true facts, our client would not have executed the papers that were presented as ordinary mortgage loan documents but which which in fact were part of an elaborate scheme for the execution of documents purporting to be loan documents but which resulted in the issuance of a negotiable instrument with the intent on your part, and undisclosed and unknown to our client, to change the terms and conditions of payment of the mortgage note from its stated terms, pay fees and profits to a variety of undisclosed third parties who were participating in the fraudulent sale of unregulated securities which purported to be backed by the mortgage note of our client and that appear to have misled investors into believing that the certificates they purchased were also backed by the property of our client.

Further, based upon conversation with our client, we have determined that the appraised value used in the loan closing was not computed in accordance with industry guidelines for using comparable time frames and geography and other indicia of probable value, as opposed to price.

The value reported to our client by the Lender and the Lender 's appraiser was intentionally or negligently tied to the contract price and was significantly higher than the real fair market value at that time. This disparity since has been easily corroborated by current values in the area, to wit : concurrent with the collapse of your scheme, the values of the real property of our client declined to the levels that existed before this scheme was initiated.

This indicates a probability that the appraisal review required of the nominal lender was omitted. In fact, based upon preliminary investigation, the appraisal review process was both omitted and intentionally terminated, along with the re-assigned or terminated personnel that would have performed such functions. It also indicates that the cost of the loan was significantly higher that what was reported on the GFE and other disclosure documents at the time of closing.

Further it is apparent that you were aware and participated in the deception by which our client was led to believe that the nominal lender was the actual lender and that the nominal lender was renting its registration and charter to third parties who were neither chartered financial institutions nor registered business entities in the state in which the property was located.

The transaction was known by you and the others at the alleged loan closing to be a sham through which unregulated, unregistered and unchartered people and businesses engaged in banking and lending contrary to federal and state law.

Taken together with the experts finding of deceptive lending practices concerning affordability and tangible benefits, the true term of the loan was significantly overstated, in that the future reset of payments made it highly likely that the loan would go into default at a time much earlier than than the expressed term of the mortgage note.

This was a fact known by every participant at the loan closing except our client.

Reducing the term of the loan to the time of expected default and adding the inflated appraisal resulted in an APR significantly exceeding the legal interest limit under state law and violate applicable laws on usury entitling our client to nullification of the note, extinguishment of the mortgage, treble damages and attorney fees, in addition to the refunds, rebates and damages stated in the experts report.

Based upon reports received from XXXX XXXX XXXX legal compliance division, it is apparent from filings with the Securities and Exchange Commission that the loan was table funded and that the nominal lender was in fact a stand-in for a series of parties who were not disclosed as the source of the funds, not disclosed as the recipient of fees ( including the nominal lender who may have received a fee of 2.5 % of the par value of the mortgage note ), and not disclosed as the actual lender in the subject loan transaction. Again while all of the participants at the loan closing were aware of these facts, our client was kept in the dark. Hence, our client was never notified regarding the identity, authority and regulation, charter, or registration of the actual lender.

Further, it can not be determined from the filings of the referenced parties, nor the notices to the borrower, who is the current actual holder in due course, who is entitled to payment under the mortgage note, whether additional third party payments were made from insurance products that are reported to have guaranteed either the payments or the principal of the mortgage note, or whether in fact the mortgage note has been prepaid, overpaid, or any balance is owed and if so, to whom. This prevents the borrower from notifying the true source of funds ( the actual lender ) of borrower 's intent to rescind. It is our determination, based upon these facts, that the loan closing was never completed and that therefore the 3 day right of rescission was neither waived nor did it expire. Under the Federal Truth in Lending Act the appropriate party must either comply with the rescission or file a declaratory action seeking to avoid the rescission. 


PLEASE GOVERN YOURSELVES ACCORDINGLY. 


Very truly yours,

Company response to consumer: Closed with explanation