Nations Lending Corporation Mortgage Lender, deceptive practices CLeveland, Ohio
Here is my situation, I was in the market to buy
another primary residence through my real estate agent I was given Mr.
Turoff's number as a reference. I contacted Mr. Turoff back in
August/September and explained my situation that I currently own a home
that is currently for sale that I have rented out, the tenant hasnt
moved in yet due to the fact that I still live in the home.
I submitted all information at Nations request and the reply I received
from Mr. Turoff was "it looks like a good loan" and we should be able
to proceed the same reply was given to my broker, 30 days later we
still havent closed on the home. Mr. Turoff asked if I was able to
obtain a co-borrower due to the fact that I on my own was unable to
obtain the loan, then I can re-finance the new home in my personal name
without the co-borrower.
Mr.
Turoff neglected to mention the fact that I would not be able to
purchase the new home because of the new FHA guidelines stating given
my current income that I cannot obtain a new home as long as I
currently own one, without have at least 2 years landlord experience.
So Mr Turoff suggested I find a co-borrower to help purchase the
home until I sold my current home, which then I can re-finance the new
home into my name removing the co-borrower.
I attained a family member with perfect credit as well as very good
income to help in the purchase of the home, Mr. Turoff knew I was
desperate to move out because my current home does not serve my needs
any longer. I received the same reply from Mr. Turoff, my relatives
name was good enough to purchase the home so we started that process.
In the middle of that process with my relative Mr. Turoff called me and
told me that if I refinanced my current home I would be able to obtain
the new primary residence on my own without a co-borrower. I proceeded
to ask Mr. Turoff what changed as to the underwriter would allow me to
purchase the new home on my own? Mr. Turoff replied that if I showed a
lower income to debt ratio I would be able to purchase the new home. I
was reprehensive to proceed due to the fact that I had more than 10%
equity in my current home and re-financing would start me all over as
well as increase my loan value. Mr. Turoff proceeded to say that I
would be better off with a lower payment and re-iterated his statement
the loan "looked good" and we would be able to proceed, against my
brokers advice to not re-finance and Mr. Turoff's willingness and his
re-confirmation that I can buy this home I reluctantly re-financed.
Not soon after did Mr. Turoff call me and tell me that the underwriter
did not approve of the loan and I still needed a co-borrower. Now three
months into this process with repeat run-around statements and all
information given to Nations Lending did Mr. Turoff call and say we can
finally proceed we just needed to show how my family member is coming
up with the down payment to purchase the new home. We submit to Mr.
Turoff adequate proof in the form of profit sharing of my relatives
company that is documented on his yearly taxes to have received in the
past and due to the fact that it is now the end of the year, my
relative deposited those earnings into his account. Mr. Turoff then
proceeded to say the validation of the down payment was not acceptable.
Now due to Mr. Turoff's negligence my co-borrower backed away from the
purchase and I am now stuck with a re-finance I believe I was coerced
into signing. I also believe Mr. Turoff's greed was the main reasoning to
this long and harmful process, I believe that because Mr. Turoff knew
that If I believed I was able to obtain the new on my own I would do
anything which included re-financing my home, also signing the loan on
the new home with my co-borrower would be a second loan for him, then
re-financing the new home in my name alone would of been a 3rd loan for
Mr. Turoff to sign.
I believe that Mr. Turoff was negligent due to the fact that I am not
under any hardship needing to re-finance my home, my loan was not
behind nor has ever been behind since the day I purchased the home, I
did not gain any monetary compensation except for $800 Nations Lending
paid to a lien holder I did not know existed (spouses debt she
neglected to tell me about), saved me only about $80 on my monthly
payment and that difference was supposed to be the determining factor
to allow me to purchase the new home. My loan has increased by almost
$8,000 due to the fact the I was coerced to re-finance and it will take
me more than 8 years to bring my loan back to where it was before I
re-financed.
It has been 5(five) months now and Mr. Turoff no longer answers his
calls and when he does its to say he is busy and I am just given a
run-around response. I hold Mr. Turoff and Nations Lending liable and
will be contacting an attorney as well making a complaint with FHA
including any other government branch that holds companies like this to
account on their lending practices.
1 Updates & Rebuttals
Nations Lending Corporation
Middleburg Hts,Ohio,
United States of America
Borrower Understood Completely That He Did Not Qualify For Home Loan
#2REBUTTAL Owner of company
Fri, June 10, 2011
Borrower understood completely that he did not qualify to buy the home he was interested in buying. He understood well before he refinanced his home and I will explain why.
Borrower was referred to me from a friend of his. Borrower called me and asked me if I he could get him approved to buy a new home. On October 22, 2009, I pulled his credit. After checking I told him he did not qualify to buy a new home because he currently had an FHA loan. FHA requires 30% equity in a home before they will consider a second FHA loan (website Zillow and county records showed there was little equity in his home). His debt to income ratio was too high to afford the new home himself. I also explained to borrower that even if he rented his house out like he suggested he would have to have a two year history as a landlord to use rental income per FHA, Fannie Mae, and Freddie Mac guidelines. He said he had a cousin that could buy the house as an investment property and rent it to him. He would then turn his current home into an investment property and do a home equity line of credit to pull out some money. We met with Borrowers cousin to get him qualified to buy an investment home. On October 27th I was given borrowers cousins information to pull his credit. Based on his credit I had him pre-approved to buy the investment property. I just had to verify borrowers cousin income documents and assets. I picked up borrowers cousin income documents on October 29th. Once this was done we submitted a loan for borrowers cousin to buy a home.
On October 22 Borrower decided to do an FHA streamline refinance on his current home. These documents are dated before his cousin signed documents to buy an investment home. Borrowers cousin signed documents on October 27, 2009. Borrower decided to refinance his home for several reasons. He originally wanted to pull about $10,000 cash out of his home but I told him he did not have enough equity and the only way to get any monetary benefit out of his house would be to do an FHA Streamline loan. The following are the benefits that Borrower received from his refinance that closed on December 1, 2009:
Benefits of Refinance:
He lowered his mortgage by over $70 per month (this was done by lowering his interest rate) His payment went from $769.00 to $699 per month. He paid off a judgment lien that was attached to his home and it was increasing in cost every day because there was interest attached to it. He had two months before he had to make a mortgage payment. He had a new escrow account set up for him for taxes and insurance. His real estate taxes that were coming due in January of $883 were paid. $500 was paid for his new home owners insurance policy that he wanted to switch to. He also had a refund from his current home owners insurance policy. The total additional cost added on to his mortgage was $6,965.39 of which a great deal was used to cover his bills which he had to pay whether or not he did have the loan.
Breakdown of Money to Borrower:
County Taxes Due in January was paid $883.96
New Home Insurance Policy he chose was paid $500.00
Hazard Insurance Escrow account set up $166.68
County Taxes Escrow account set up $401.79
Judgment Lien payoff paid off $800.00
Interim Interest until 1st payment due $317.54
TOTAL $3069.97
Money to Nations Lending Corp:
Origination Fee to Nations Lending Corp $717.00
Processing Fee to Nations Lending Corp $835.00
Funding Fee to Nations Lending Corp (underwriting) $684.00
TOTAL $2436.00
MIP to HUD (insurance charges to HUD) $1305.00
Title Fees Total $1134.60
Recording Fee to County $99.95
Credit Report Fee $20.45
Borrower told me with the two months between mortgage payments he would use this money to do some upgrades to the home he was hoping to move in to such as putting in new carpet and painting.
Borrowers loan closed while we were working on borrowers cousin purchase. He had his 3 day right of rescission to cancel his loan which he did not do.
On December 2, 2009 we ordered the appraisal for the purchase of 14932 Sherwood drive, Strongsville Ohio for borrowers cousin.
On December 18th I told borrowers cousin that we needed to verify where his down payment was coming from. He told me he did not have a personal checking account. After asking him 3 times over a 2 week period he finally gave me his personal bank statements. Unfortunately he did not have enough money in his account for the down payment. Borrowers cousin did get profit sharing but his past history of getting it was not enough to cover his down payment. Borrowers cousin did show us a $25,000 deposit from his business. We showed this to the underwriter but they had a problem with this because there are four partners and the bank statement showing where the money came from did not support $25,000 profit sharing for all four partners but only enough for borrowers cousin. I suggested that borrowers cousin take out a home equity loan for his down payment. This would be easy because he owned his home free and clear and was worth well over $200,000.
I called a couple of local lenders and went over the scenario with them. They said they could get an approval for a home equity loan very quickly. I even told borrowers cousin that any costs associated with the Home equity loan would be subtracted from Nations Lendings fees.
On January 5th I was told borrowers cousin had decided he would have to back out of the purchase of the investment property for personal reasons. I was told that his banker from 5th Third Bank who was working on a large 3 tiered business loan for borrowers cousin and advised him that it was not a good time to take on a new mortgage and additional debt. The business loan he was working on was too important and taking on any new credit obligations could jeopardize his business loan.
Some loans are harder to do than other loans. They require the cooperation from the borrower.
Borrower told us that he was unhappy about this. We had no way of knowing his cousin would back out of the purchase. We offered to do the purchase for borrowers cousin with no charges from us if he did go forward with the purchase. Borrower told us that if we could find a way to get him the loan to buy the home he would be satisfied with everything we did for him including the refinance of his home. This was told to me and again to another loan officer in our office, on January 20th.
I understand that Borrower is unhappy that he did not get to move into his cousins investment property, since he backed out of the purchase, but there is nothing we could do about this. His unhappiness should be with his cousin and not with us.
Nations Lending Corp has funded over a billion dollars in loans. We try to satisfy every single customer. Unfortunately sometimes there are things beyond are control in the loan process that hold up a loan.