Consumer complaint received 2018-10-18 00:00:00
Product: Mortgage — Other type of mortgage
Issue: Trouble during payment process — 
Company: U.S. BANCORP
State: TX

Complaint narrative:
US Bank home mortgage is holding my payments not applying them to my mortgage account to put me in foreclosure statute but have a USDA guaranteed gome mortgage and they cant foreclose on my at all. read this since XX/XX/XXXX they sent me 9 foreclosure letters starting got one XX/XX/XXXX saying I missed XX/XX/XXXX payment that is not due till XX/XX/XXXX, Then they sent me a letter saying sence my bank blocked them for stealing 2 payments without having auot withdraw on my home mortgage account they sent out a default letter instead. READ THIS US BANK!!!! 
Default and Foreclosure Although the lender and USDA follow a complicated foreclosure process in their own dealings, from the borrower 's point of view a USDA loan foreclosure proceeds in much the same way as a foreclosure for other mortgage loans. Delinquency begins with your first missed payment. The situation is serious by the third missed payment, when the lender typically threatens foreclosure unless you bring your account current by a specified date. At this point, you're in default, and the U.S. Department of Housing and Urban Development notes that this warning may be your last chance to prevent foreclosure. If you're unable to work out an agreement with your lender, your home is repossessed, and the USDA sells it to cover the unpaid debt. If the sale price falls short of covering the USDA 's loss, the USDA turns the debt over to the Treasury Department for collection of the shortfall. The shortfall is called a deficiency. 

The Personal Guarantee Most lenders and investors can't force a borrower to pay a deficiency unless a court grants a deficiency judgment. Not so with the USDA. The USDA protects its investment by requiring a personal guarantee from the borrower that the borrower will cover the USDA 's loss in the event the borrower defaults on the loan. The practical effect, notes California attorney XXXX XXXX, writing for " XXXX XXXX XXXX XXXX, '' is that the borrower guarantees his own loan. You sign off on the personal guarantee when you close your loan. The form you sign promising repayment is just one of many the escrow officer explains to you as you're signing a stack of papers, so it's possible that you could get through the process without fully understanding the commitment you've made. 

So stop holding my payments to force foreclosure you cant USDA sees what your doing after I sent copies of all letters you sent me to the USDA guarantee office and your in breach of contract. 
Read this from my legal adviser not attorney yet. 
Lender liability, which first gained prominence in XX/XX/XXXX, has gained acceptance as a substantive body of law. Briefly, lender liability law says lenders must treat their borrowers fairly, and when they don't, they can be subject to borrower litigation under a variety of legal claims. The decade-long evolution of lender liability has resulted in most cases now involving breach of contract and/or fraud claims. 

Breach of Contract/Fraud For years, lenders were the ones who typically sued borrowers for breach of loan agreements. With the arrival of lender liability, borrowers became just as likely to sue lenders for those breaches. 

A loan agreement is like any other contract. If the agreement was fraudulently induced or there was an absence of mutual consent, the agreement can not be enforced. If the loan contract was breached, the lender can be sued if it was the breaching party. 

The most common remedy pursued by borrowers when a breach of a loan agreement has occurred is the recovery of damages. This can include both the difference between the loan amount and the costs for obtaining a replacement loan, and any lost opportunity or lost profit damages. 

Lenders often assert the " parol evidence rule '' to prevent borrowers from recovering against them based on oral promises the lender may have made to the borrower. The rule prevents admission of evidence in court of certain oral agreements that would contradict a later signed agreement. The theory behind this rule is that written evidence is more accurate than human memory, and the rule would prevent fraudulent later-asserted claims. Unfortunately, this can open the door to lender misconduct ( i.e., a lender making an oral promise that the lender then refuses to fulfill ). Luckily for borrowers, there are several exceptions to this " apparent '' open and shut rule. 

In XXXX v. XXXX XXXX XXXX XXXX XXXX XXXX, XXXX convinced the plaintiffs, two couples who operated a cattle ranch, to do business with it by making a series of promises about funding. The XXXX loan officer assured the plaintiffs that XXXX understood the cattle industry and knew it was cyclical and that plaintiffs could take 10 to 20 years to pay off a capital loan. XXXX also induced the plaintiffs to purchase a second cattle ranch. 

When the time came to sign the loan papers, the plaintiffs noticed that the documents contained new provisions to which they had not agreed and that the document structured the real estate loan for only one year. The XXXX loan officer assured them that these provisions were mere formalities and they had nothing to worry about. Based on the officer 's assurances, the plaintiffs signed the documents. 

When XXXX failed to honor its oral promises and made unreasonable demands regarding the real estate loan, the plaintiffs sued. XXXX defended itself based on the parol evidence rule. The plaintiffs prevailed at trial and XXXX appealed. The appellate court applied the parol evidence rule and found that the oral agreements were not inconsistent with the written agreement and were the type of agreements that might have been made separately. The court found that it would have been highly unlikely for the plaintiffs to have agreed to repay the loan in a year as reflected in the loan documents ; if so, the plaintiffs would have purchased the ranch knowing with virtual certainty that they would lose it, as well as other assets, at the end of one year. A one-year loan would also mean that XXXX had made the loan knowing it would be required to foreclose on it in one year. As a result, there was nothing inconsistent with loan documents prepared on a yearly basis, with a separate oral agreement to renew over a long period. 

Fiduciary Relationships A fiduciary relationship is one in which one person -- the fiduciary -- owes special duties to another person, and must look out for that other person 's interests with special care. Early lender liability cases attempted to establish that lenders had such fiduciary duties to their borrowers. However, in later cases, lenders were successful in limiting the ability of borrowers to contend that the lender-borrower relationship is fiduciary in nature. 

In XXXX v. XXXX XXXX XXXX, the court attempted to define the elements of a fiduciary relationship between lender and borrower as follows : 1 ) the borrower must have faith, trust and confidence in the bank ; 2 ) the borrower must be in a position of inequality, dependence, weakness or lack of knowledge ; and 3 ) the bank must exercise dominion, control or influence over the borrower 's affairs. 

If a lender-borrower relationship is kept at arm 's length ( the typical debtor-creditor scenario ), the relationship is not fiduciary. Lenders typically argue that all lender-borrower relationships fall under this category. Fortunately for borrowers, however, the courts have delineated exceptions where the situation is not arm 's length or where the bank is more than merely a lender.

For example, when a lender holds itself out as a financial advisor, the lender will be held to the same fiduciary standard as any financial advisor. 

In XXXX v. XXXX XXXX XXXX, the fiduciary relationship was established because the bank failed to keep its banking and investment advice separate. XXXX approached his bank seeking a {$5000.00} loan for himself and his XXXX-year-old mother, XXXX XXXX. The bank employee he spoke with encouraged him to get a larger loan and to invest the money with Invest, an investment firm operating out of the bank branch. 

On the advice of the bank employee, instead of the {$5000.00} he initially sought, XXXX borrowed {$100000.00}, secured by his mother 's home. He then opened a trading account with XXXX and invested approximately {$52000.00} of the loan proceeds. The account was eventually wiped out in the XX/XX/XXXX stock market crash, and XXXX XXXX later defaulted on her mortgage. The XXXX sued the bank and Invest for breach of fiduciary duty and negligence. The Scotts settled their claims against the bank before trial, but the suit against the bank went ahead. 

After a six-day trial, the jury found in favor of the XXXX on a claim for breach of fiduciary duty. The trial court, on a subsequent motion, acknowledged the rule that a debtor-creditor relationship does not alone create a fiduciary relationship. However, the court found the jury verdict of a fiduciary relationship was supported by the manner in which the bank : 1 ) extended credit to the XXXX, 2 )  used promotional devices to persuade them to invest loan proceeds with an affiliated company with whom the bank shared profits, and 3 ) continued to advise the XXXX about their investments through employees that worked for both the bank and the investment company. 

Besides monetary awards of {$36000.00}, the bank established a life tenancy for XXXX XXXX so she could stay in her home in spite of foreclosure. 

Inappropriate Collateral Sales Lenders can also run into trouble by inappropriately selling collateral after a loan defaults. The Uniform Commercial Code requires that the method, manner,  time, place and terms of the sale be " commercially reasonable. '' Courts have found sales to be commercially unreasonable where the lender relied on an appraisal that it knew or should have known was too low, or provided insufficient publicity for the sale to generate a sufficient number of bids. 

In one case, XXXX XXXX XXXX XXXX v. XXXX, the lender refused to hold a public auction of the plaintiff 's repossessed equipment, and instead offered the equipment to a limited wholesale market made up of its own dealers at prices much lower than the equipment 's value. Not surprisingly, the court found the sale failed to meet the test of commercial reasonableness. 

When collateral has been wrongfully repossessed or disposed of, the lender may lose the right to collect a deficiency, forfeit its security interest or be liable for damages. The provisions on commercial reasonableness protect guarantors as well in many jurisdictions. 

As the area of lender liability matures, expect additional changes and refinements of this body of law as lenders and borrowers ' rights activists lobby in state legislatures and Congress for their representative sides. 
I had an individual call me I cant menchen names yet, he was contacted by you talking about my account without my permission asking on information if they would by the house if I am foreclosed on thats proof you are trying to perusly trying to foreclose and you cant. I got you for violation of privacy and ID theft when you gave out my information I have the mans signed statement read this for the payments you have stolen .Mortgage fraud occurs when a potential homebuyer, seller, or lender lies or omits key information that leads to a mortgage loan approval or terms that the applicant wouldn't normally qualify to receive. 

More formally, the FBI defines mortgage fraud as any " misstatement, misrepresentation, or omission in relation to a mortgage loan which is then relied upon by a lender. '' Mortgage fraud is a serious offense and can lead to prosecution and jail time for convicted offenders. Under XXXX federal and state laws, mortgage fraud can result in up to 30 years in federal prison, and up to XXXX XXXX in fines. 

The Growth of Mortgage Fraud Mortgage fraud is a growing problem. According to XXXX, mortgage fraud increased 16.9 % in the second quarter of XX/XX/XXXX vs. the prior year. The fastest-growing subset of mortgage fraud is occupancy fraud, which happens when mortgage applicants deliberately provide false mortgage application information to purchase a home. 

Mortgage fraud is on the rise for multiple reasons : Rising Demand for Homeownership : U.S. homeownership rates hit 64.2 %, according the the U.S. Census data released in XX/XX/XXXX. Homeownership has been on the rise since XXXX, when it hit a 50-year low of 62.9 %. As home inventories shrink, demand for homes is on the rise. That can lead to more fraudulent mortgage applications being filed, as homebuyers try to get an edge in a competitive home-buying field. 
Interest Rates Are Rising : Part of the growing demand for new homes is time-related. With interest rates once again on the rise, homebuyers want to act now, and buy a home before rates rise even further. Conversely, home sellers want to cut a deal before high interest rates thin the pool of qualified buyers. 
Higher Home Values : Mortgage fraud is also fueled by stronger U.S. home values, which draws more buyers into the market to capitalize on them. In some cases, those buyers will turn to mortgage fraud to get the inside track on buying a potentially profitable property. 
Old-Fashioned Greed : In the event of seller-oriented mortgage fraud, like home appraisal fraud, shady home sellers will try to artificially inflate the price of their home, to get a bigger pay day when the property is sold. 

Fraud for Profit This type of mortgage fraud, prioritized by the FBI, is usually committed by industry insiders who use their specialized knowledge or authority to commit or facilitate the fraud. Many times mortgage fraud for profit involves collusion by industry insiders, such as bank officers, appraisers, mortgage brokers, attorneys, loan originators, and other professionals. Fraud for profit focuses on misusing the mortgage lending process to get cash and equity from lenders or homeowners. 

Fraud for Housing This type of fraud is typically when a borrower or potential homebuyer is motivated to acquire or maintain ownership of a house. The borrower may, for example, misrepresent income and asset information on a loan application or entice an appraiser to manipulate a property 's appraised value. 

These fraud-for-housing crimes are further broken down into different types of mortgage fraud. 
The gown load ( us bank Current Loan Information.html ( 78.5 KB ) Shows you changed my contract breaching contract by changing contract payment amount with no amendment to the contract Now you need to read the transfer order it said on closing or transfer of the note and contract no changes can be made at all. BREACH OF CONTRACT and in your own words from my sighn in on line showing the changes FRAUD. so try and change the online back to normale the breach already happened so if you change it back still in breach of contract and OCC said based on that information I can own the house out right and nothing you can do and USDA will drop the guarantee on the loan. 
And with holding and stealing my payments and sending my a fauls pay off notes is in writing you are trying to defraud me for trying to sell the house more then the loan is. LOL have fun with this one everything is in US Bank home mortgage own writing so eat that.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation