Consumer complaint received 2026-04-21 00:00:00
Product: Mortgage — Conventional home mortgage
Issue: Closing on a mortgage — Closing disclosure or other related disclosures
Company: HIGHLANDS RESIDENTIAL MORTGAGE
State: TX

Complaint narrative:
XX/XX/year> XXXX ( XXXX XXXX. XXXX ) conducted by XXXX XXXX. XXXX classified as XXXX, appraised at {$900000.00}. The disputed room is labeled " XXXX '' in the XXXX XXXX and " XXXX XXXX '' in the photo addendum XXXX different designations within the same report. XX/XX/year> Borrower ( XXXX XXXX ) submitted a formal XXXX XXXX XXXX XXXX XXXX XXXX through Highlands Mortgage 's own internal dispute process, citing material factual error : misclassification of the property as XXXX XXXX. Submitted to XXXX per HRM policy. XX/XX/year> XXXX XXXX forwarded the XXXX 's written rebuttal without processing the dispute per XXXX 's XXXX XXXX Disputes XXXX. She wrote : " My question was if it had a closet, which is a hard 'no ' when it comes to counting it as a bedroom '' a factually incorrect statement that inverts recognized appraisal standards. XXXX was twice redirected toward paying down principal rather than having the dispute addressed. XX/XX/year> XXXX XXXX forwarded an internal email confirming : " the loan was sold even though it was marked to be held. '' XXXX XXXX acknowledged in the same chain : " our intention was to service the loan, and the error in not doing so has been addressed internally. '' These are XXXX independent written admissions of the loan disposition error. The only remedy offered a courtesy re-appraisal for XXXX purposes contingent on XXXX 's agreement does not address the full scope of harm. Issue XXXX : Misrepresentation of XXXX XXXX The borrower entered into this mortgage transaction based on explicit representations that the loan would be retained and serviced in-house by Highlands Mortgage as a portfolio loan. This was material to the decision to proceed. The loan was instead sold to XXXX. XXXX Independent Written Admissions Highlands Mortgage staff have provided XXXX independent written confirmations that the loan was specifically flagged to be held and was sold due to an internal processing failure : Admission XXXX XXXX XXXX, XXXX XXXX XXXX ( XX/XX/year> ) : " As luck would have it, the loan was sold even though it was marked to be held. '' Admission XXXX XXXX XXXX, XXXX XXXX XXXX Support ( XX/XX/year> ) : " I know our intention was to service the loan, and the error in not doing so has been addressed internally. '' Why the Proposed Remedy Is Inadequate Highlands Mortgage offered to pay for a courtesy re-appraisal for XXXX removal purposes if XXXX agrees. This offer is inadequate for XXXX reasons : It is contingent on XXXX 's agreement an outcome Highlands Mortgage does not control and can not guarantee It addresses only XXXX narrow consequence of the error ( XXXX ), not the broader harm from the loan being sold contrary to what was represented It does not address the unresolved appraisal deficiency at all Issue XXXX : Appraisal Deficiency, Lender Misrepresentation of Standards & Policy Non-Compliance A. XXXX 's Written Rebuttal Contains No Standards-Based Justification In response to the formal dispute, the XXXX provided the following written response ( transmitted through XXXX XXXX on XX/XX/year> ) : " There is a closet ; however, this room is not considered a bedroom for multiple reasons. This room is the only access point from the main part of the house to the garage. It's also the only access point from the main part of the house to the laundry room. Additionally, this room does not have direct access to a full bathroom. Most market participants would consider this room as a game room, office, or similar. It should be noted that there is no data in this market area that indicates a value difference between a XXXX bedroom and a XXXX bedroom. '' None of the XXXX stated reasons passageway use, access to laundry room, or lack of direct bathroom access appear in XXXX XXXX or the International Residential Code ( IRC ) as criteria for excluding a finished, closeted room from bedroom classification. The XXXX 's own report states XXXX was developed per XXXX XXXX, yet that standard was not applied to bedroom classification. B. Lender 's Loan XXXX Misrepresented Industry Standards XXXX XXXX wrote in her XX/XX/year> response : " My question was if it had a closet, which is a hard " no '' when it comes to counting it as a bedroom. '' This statement inverts established appraisal and building standards. Under XXXX XXXX and recognized bedroom classification criteria, the presence of a closet is a characteristic that supports bedroom designation not a basis for exclusion. No recognized standard not XXXX XXXX, not the XXXX, not XXXX XXXX guidelines treats a closet as a disqualifying factor. A licensed senior loan XXXX misrepresented the applicable standard to a borrower in the context of a formal appraisal dispute. XXXX XXXX Contradiction on Value Impact Within the Report The XXXX 's narrative states there is " no data '' showing value difference between XXXX and XXXX bedrooms. Yet in the same Sales Comparison Grid, the XXXX applied : - {$8000.00} adjustment to Comparable Sale # XXXX ( XXXX bedrooms ) for bedroom/room count - {$4000.00} adjustment to Comparable Sale # XXXX ( XXXX bedrooms ) for bedroom/room count These are documented adjustments within the XXXX 's own report that directly contradict his stated conclusion. Bedroom count demonstrably drove adjustments in his own analysis which means it affected the subject property 's valuation. The appraised value of {$900000.00} may not accurately reflect the property 's market value as a XXXX home. XXXX XXXX 's Own Appraisal Dispute Policy Was Not Followed XXXX 's Appraisal Valuation Disputes Policy requires the Appraisal Desk to : Submit the dispute to the XXXX for reconsideration Request the XXXX correct errors and notify the underwriter If rejected, notify the requesting party in writing with the reason for determination None of these steps occurred. XXXX XXXX 's own XX/XX/XXXX internal email to XXXX XXXX references " his appraisal dispute '' confirming it was known internally yet no written determination was issued and no correction was made. XXXX XXXX XXXX Confirms XXXX Classification The borrower 's representative provided XXXX XXXX XXXX showing the property was publicly listed as a XXXX home. This directly contradicts the XXXX 's classification and was presented as part of the dispute. It was not addressed in the XXXX 's rebuttal or by XXXX Mortgage. XXXX XXXX Inconsistency in the XXXX Report The disputed room is labeled " Office '' in the floor plan sketch and " Game Room '' in the photo addendum XXXX different designations within the same report. This inconsistency further undermines the reliability of the report 's methodology and raises questions about the care taken in preparing the analysis.

Company response to consumer: Closed with explanation