Consumer complaint received 2021-01-08 00:00:00
Product: Mortgage — Conventional home mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage — 
Company: NAVY FEDERAL CREDIT UNION
State: CA

Complaint narrative:
On XX/XX/XXXX, I submitted an application for a home mortgage loan pre-approval letter to Navy Federal Credit Union online. 
XX/XX/XXXX I received a request to submit asset information, tax documents, pay stubs and other information. I submitted all but my asset information, because at the time I had kept my down payment and closing cost funds in cash. This same day I received a phone call from XXXX XXXX. She inquired about my asset information and requested that I submit my bank statements for the last 60 days. I informed her that if I submitted my current bank statements that my down payment would not appear on them as I've been keeping my finances in cash as a personal preference. I informed her that despite having my downpayment in cash that I could prove my income with several recent pay stubs. 

While on the phone, XXXX told me that I should explain this in writing and email it on our thread, which I did. Shortly after I sent the email explaining my asset discrepancy, she responded with : " Good afternoon Mr . XXXX, unfortunately " Cash on Hand '' is an unacceptable source for down payment or closing costs and may not be used to qualify. Do you have any retirement accounts or other assets? '' As a first time buyer, I was confused at how this process works and replied with : " Im confused. What is considered an acceptable source for a down payment if its not cash? Cash thats currently sitting in my bank account. 
I can prove that I have the down payment and closing costs. 
I can also prove where Ive earned the money with several recent paystubs. 
What is that Im not understanding? '' After this, I received no response from XXXX to my last email. 

On XX/XX/XXXX I decided to follow up with XXXX via a phone call. While on the phone I asked XXXX to explain how my check stubs would not be sufficient information to trace where my money has come from? And to learn more about this application process in general. She informed me that " this isn't how this works. You can't buy a house with mattress money. '' She actually referred to my savings as " Mattress money. '' I took great offense to this as " mattress money '' is a term widely used in the streets to describe money made from drug deals. I HIGHLY doubt that if I was NOT a person of color and had lived in a region other than XXXX, that I would have been met with the same disrespect. I've worked very hard for the money I've saved. I told her that " I have check stubs to prove where my money has come from and that I've earned it. It's not mattress money. '' She informed me that if I did not have the appropriate bank statements, then I would need to provide documentation from a retirement account to continue my application process instead. I asked her " how long do I have before she has to re-run my credit for this application. '' She responded with " up to 90 days. '' I said " great, I'm going to put a pin in this and buy me some time to gather the proper documents. '' She asked If " I would like her to withdraw my application ''. I said " no. that's not what I want. '' On XX/XX/XXXX, I had decided to take a step back and gather my thoughts. I decided that I would like to continue this process AFTER the holidays, in the new year. XXXX was approaching, and after XXXX I had a trip planned that would put me out of town until XX/XX/XXXX. Considering this, I reached out to XXXX XXXX to follow up with the following : " Hey XXXX! 
I just wanted to follow up from our convo yesterday. I would like to revisit this sometime in the new year, as I still need to get a few things in order before proceeding with my application. As for now, please do NOT withdraw my application. I will be reaching out to you once I have the items needed. 
Thank you '' She responded with : " Good morning Mr . XXXX, thank you for your email. Please provide me with documentation for any retirement assets for us to proceed with decisioning your loan. If you don't have any other assets let me know. Thank you for your attention to this. '' From here, our communication had stopped. Then, on XX/XX/XXXX I received an email stating : " Navy Federal Credit Union has uploaded documents pertaining to your mortgage application XXXX and has made them electronically available for viewing and signature. '' I signed in to my account to find that the document was a " DENIAL OF CREDIT due Insufficient cash '' based on information received from an outside source other than a consumer reporting agency. This took me by surprise as I had not submitted any information, nor did I consent to Navy Federal gathering any account information. 

What's more, is that this denial document would mean that XXXX XXXX submitted my application to Underwriting without my consent. Subsequently tarnishing my excellent credit with a mortgage loan denial. 

Once I returned from my trip on XX/XX/XXXX, I called Navy Federal to file a complaint and report the actions of XXXX XXXX. I was connected with manager XXXX XXXX. I explained to her what happened and that I would like to file a complaint. She was taken aback as according to her " XXXX has received nothing but positive feedback from her clients. '' While talking to XXXX, it became clear from her cavalier tone and occasional anecdotes that she had no intention of reprimanding XXXX for her mishandling of my loan application. Hence why I am here submitting a complaint. XXXX XXXX resolution was, " to start a new application with a new loan officer. '' This was unacceptable. She also suggested that I could file an appeal to underwriting within 48 hours of XXXX submitting my application to them. Upon further review XXXX informed me that filing an appeal would not be possible as XXXX submitted my application to underwriting on XX/XX/XXXX. The 48 hour period had long passed by now. She acknowledged that XXXX made a mistake, and was confused as to why she would process my application without my consent or the proper documentation. Which essential set me up for failure. XXXX also thought it would be enough to simply bring this issue to XXXX XXXX attention and nothing more. 

XXXX would have me believe that this was a minor issue, and that restarting an application with a new loan officer would be an easy fix. That may be the case if I chose to continue business with Navy Federal Credit Union. But if I decide to go to a new institution to pursue a home loan, a " denial of credit '' will show up on my report and require much explanation. For this reason I am extremely upset and disappointed that my application was handled so poorly by XXXX XXXX. She knowingly submitted this without the proper information which lead to a negative result, and a severe loss of trust in Navy Federal Credit Union. This is a textbook bad business practice. 

It's hard enough for people of color to purchase homes in America, making it harder with unwarranted negative marks on their credit report is salt on the wound. This was a negligent act met with little to no effort to rectify and it's unacceptable.

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