Consumer complaint received 2021-11-02 00:00:00
Product: Mortgage — Home equity loan or line of credit (HELOC)
Issue: Applying for a mortgage or refinancing an existing mortgage — 
Company: FIFTH THIRD FINANCIAL CORPORATION
State: NC

Complaint narrative:
Hello, I would like to file a complaint and bring to your attention my experience with Fifth Third Bank in obtaining a HELOC on a rental property. 

Below is my attempt to summarize as much as I can to highlight the situation.On XX/XX/XXXX, I reached out to XXXX at XXXX, NC location to check if the bank offers Heloc on rental properties. I told him the rental property is fully paid for so the potential lender will have a first lien on the property. He told me yes but he wanted to double check with his manager and he told me I would also require to open a checking account. 

Next day on XX/XX/XXXX, I received a voicemail from XXXX confirming that Fifth Third will offer Heloc on rental property. We set an appointment to meet to apply for HELOC. 

On XX/XX/XXXX, during the meeting, XXXX was more interested in opening the checking account than discussing the HELOC. I told him I like to have more info on HELOC first before I apply for checking account. I asked him what rate can they offer me. I was told around 4 %. I told him that seems high and if there is a way to reduce it. He told me the rates could go to Prime if I got a preferred status with the bank and that can be obtained by having deposits of $ XXXX. These deposits can be in savings, checking, brokerage, or retirement accounts. 

That sounded like a good offer to me, so I decided to go ahead with the process. I thought he will take Heloc application first and then the checking account. He said that he will open the checking account first and then he will have to setup another appointment for Heloc application. I found that to be strange but I went with it. While filing the checking account application he asked me if I had cash to fund the account. I said I dont carry cash. He then asked me if I had a check and I said no. I asked him can we not do this electronically. He said no. He asked me if I wanted to do cash advance on my credit card. I was shocked and upset as cash advance incur high fees. Any banker suggesting such is very irresponsible in my view and I was not going to work with such a banker. I told him I am not comfortable with all this and I walked out of the branch. 

I was really interested in getting prime rate ( 3.25 % ) on a Heloc on my rental property. So I called another Fifth Third banker. I called XXXX XXXX but we were not able connect. I then called XXXX XXXX and she advised me that Heloc is done by a personal banker and not a Mortgage Banker and she was a mortgage banker. I shared with her how my experience with XXXX went. She suggested that she can help. She said will first validate all the info based on my requirements and then have a personal banker reach out to me to set up an appointment if all checks out. 

XXXX called me next day and shared the following info - One can get HELOC on rental property if following conditions are met - 65 % Loan to Value, $ XXXX max credit line, 35 % Debt to income ration, first lien on the property.On rates XXXX shared that one can get an introductory offer for 1.99 % for there the first year. Also if I get preferred status then the rates will be P+0.25 %. This was different than what XXXX told me. XXXX also added that preferred status can be obtained by having a deposit of $ XXXX which can be in the savings, checking, CD, brokerage account or retirement account. I asked if XXXX account is eligible and she confirmed it is. 

Based on this information we agreed to have a personal banker give me a call to setup the appointment. XXXX XXXX called me and we setup an appointment to meet on XX/XX/XXXX to meet at the XXXX location. 

On XX/XX/XXXX, I met XXXX and before we start with any application or do any paper work I shared my requirements and what XXXX had shared. XXXX confirmed and we decided to do a HELOC application first. We also agreed that we will setup another appointment with another banker who will help me through the process to get preferred status, i.e. setup an IRA account where I will move $ XXXX to get a preferred status. 

Application Process - This was done by XXXX asking me bunch of questions. She printed the application for me to review before she submits it. I pointed out 3 things on the application - Property Year Acquired = XXXX ( correction-this should be XXXX ) Property Type = Secondary Residence ( correction-this should be Investment ) Present Address = no tick mark ( correction-this should be marked as OWN ) Ceci mentioned that she noted all XXXX changes and has put those in the comments section so we are good to go. 
After this XXXX asked me if I also want to open a checking account. I told her fine as long as I get a HELOC. She opened the checking account with {$0.00} balance. This was interesting as with XXXX I was asked for cash and then check and then cash advance on credit card. 

XXXX called me next day to let me know that she has some bad news. She informed me that they will not approve my application as the underwriter thinks that this is a rental property and not a secondary residence. I told her that we did apply for rental property so not sure whats going on. I asked her if I can talk to the underwriter to better understand their rationale on the decision and if I may clarify or provide more information for them to reconsider. I was told no. XXXX then started talking something about reserves. I asked her what does the underwriter need. If they need reserves please let me know and I will be happy to satisfy that requirement. I told XXXX if they need to see 6 mos of XXXX as reserves which comes to around $ XXXX then the funds in my checking account should do that. I typically keep around $ XXXX in my checking account so that should actually satisfy their 12 months of XXXX if need be. 

The fact of the matter is the banker knew I was applying for a rental property. This was confirmed by XXXX, XXXX and XXXX herself. So the bankers are in sync. They were accepting application on XXXX on rental property. It seems like their underwriter did not get the memo. The underwriter declined me because this was a rental property. OR the personal bankers knew this and they used this to just open the checking accounts. Perhaps they have a quota to meet and for them it didnt matter how they got customers to open the account. 

I then called XXXX again to share my experience with her. She was shocked and said she will look into it. She came back with I got so many different answers this afternoon about the Heloc with Investment properties, I dont know what the correct answer is to be honest with you!

If Fifth Thirds own employee is not able to navigate their own organization and figure out their own rules there is no way on earth any customer can understand whats going on. 

Few days later I got a letter in the mail about my application. It was declined. Decision reason provided wasLack of qualifying deposit relationship. This was shocking as this is not what XXXX communicated to me. 

During the application the banker knew I was not an existing customer nor did I have any relationship. This is just cheating. Was this a stunt to get me open a checking account? This was a hard inquiry on my credit as well. 

Just to show/prove how messed up this is I called another branch of Fifth Third on XX/XX/XXXX at XXXX and spoke to XXXX. I provided her with same information, i.e. Property Value = $ XXXX ; Property paid off-no mortgage on it ; credit score XXXX Here is what I was told - Yes I can get HELOC on rental property. I can borrow up to 80 % of value. Max limit to borrow is $ XXXX. Rate = 4.39 % Since I was denied due to deposit relationship I then asked this. 
Do I need to be an existing customer? She said NODo I need to have any deposit relationship to qualify for HELOC? She said NO Can someone please explain this? Fifth Third bank did wrong by me. I am asking them to do the right thing here.

Company response to consumer: Closed with explanation