Complaint Review: Loan Depot - Foothill Ranch California

Loan Depot was the worst mortgage company I ever dealt with.  Last July I started refinancing with them.  Like everyone else here has reported I worked with one broker to get my rate locked but two days later was told he went out on vacation and his supervisor took over.  I think they lots of low paid sales reps whos job is to get your deposit and get you into the system.  After that point they transfer it to a senior representive that knows hows to exploit any loopholes to jack up the cost of the loan.

My call two days later was because I had submitted all of their requested documentation and I wanted to confirm they had all of the documentation and were not waiting on me for anything.  They did and arranged for an appraiser to come out about 4 days into the process.  After about 2 weeks I get a call back with the appraiser claiming the house came back too low. At first I was unsure thinking maybe the house value had dropped much more than I thought.  I reviewed the report in detail and discussed it with a family friend who is also an appraiser.  I submitted an appeal on the appraised value based on the fact they were not using comparable comps, and not making any adjustments due to obvious property differences.  The appeal was ignored.  Finally called the State Bureau of Real Estate Appraisers and discussed the situation with their public consultants.  Based on what they heard they requested that I file a formal complaint with a copy of the Appraisal Report so they could take disiplinary action against the appraiser.  (BTW, Loan Depot was wanting to add $377/mo for PMI plus add an extra 0.25 points to the cost of the loan).

Mean while I continued to work with the supervisor and he finally agreed to put the appraisal aside and he could have another appraisal done if I was willing to pay for it but we would have to go with that value regardless if it was higher or lower.  I told him I would need to think about it and call him the next day.  I immediately got off the phone and called two other lenders, locked the rates at a 0.25% lower and was still getting a $5600 back in credits from one because rates had momentarily dipped.  I had decided if I was going to pay for a new appraisal I was better off just starting with a new lender at a lower rate.  I didn't want to take a chance of another bad appraisal so I decided better to pay the $500 to two lenders because my new loan was going to be saving me $1200/month.  I submitted the required paperwork the same day to both new lenders and arranged for the appraisals for Monday and Wednesday.  Somehow in the process I got a call from a new appraiser from Loan Depot and asked to come out.  I said sure how about Tuesday.  I hadn't yet agreed to pay for the new report but if the appraiser wanted to come out then I didn't really care.

About a week later I got all three reports back.  Loan Depot's new appraiser's report was 25% higher, the other two lenders were 30% and 38% higher.  I continued to work with all 3 of the lenders.  When the new Loan Depot report came back the supervisor called me back saying that he needed to add 1/8pt to the cost of the loan to keep the rate locked because we had run out of the 30 day lock.  I tried to get him to waive it but finally relented because I knew it would cost them money to lock it but if I went with someone else they would lose out on that plus the cost of the effort to finish processing the loan.  

I continued to work through the underwriting process with the 2nd lender and the 3rd lender who had the highest appraisal and a 60 day lock had a backlog in their processing department.  The 2nd lender had better offer than Loan Depot but the 3rd Lender's total cost of the loan was still nearly $8000 cheaper so I wanted that deal.  About a week into the Loan Depot extension I got a call from the Loan Depot processing agent saying they had finished the underwriting and were ready to fund the loan.  I decided to stall her and explained that I had noticed that rates had dropped from where mine was locked.  I wanted her to call me back 4 days before the lock was to expire and if the rates were still down I was going to let the rate float to get the lower rate.  

During the time I tried to continue to move the 3rd lender along but they were barely going to start the underwriting by the time the Loan Depot rate was going to float.  The 2nd lender was almost finished the processing so I had a good alternative to Loan Depot.  Finally a week before Loan Depot's 2nd rate lock was going to expire I got a call from the supervisor again wanting me to fund the loan.

I finally told him honestly how unhappy I was with the entire process (of course I had been complaining many times a week for the past nearly 2 months eating up tons of their time).  I told him I realized how much time and effort they had put into securing this loan but unfortunately I have an offer from another lender and they have already finished the appraisal and just needed to finish underwriting.  I told him if he would match the exact terms of the other loan I would still go with Loan Depot because his company was already ready to close and the other company would have another 40 days before they were ready.  I sent him a copy of the other lenders appraisal report and GFE and he called me back and agreed to match the terms as long as we closed by the end of the week.  We went back and forth for the rest of the week while I went over every line of closing statement making sure the offer matched.  The initial copies I received had the credit amounts computed incorrectly, they tried adding in the charge for the 2nd appraisal report, the rate lock extensions, etc.

In the end of the day I ended up with the loan at 0.25% lower interest rate, and ~$8200 cheaper (The $5600 lender credit plus Load Depot needed to waive the processing fee they were going to charge me.)  I will say the whole process completely sucked and I would never do it again but at least I didn't get cheated.

BTW, after the loan was funded they tried calling me back insisting that I increase the coverage on my home.  They wanted me to have enough insurance to cover the entire amount of the loan.  I looked at it and told them to stuff it.  Under California Law lenders are only able to require you to insure your home up to the total cost of replacement of the home.  My insurance company had done an inspection on the home to determine the cost of replacement and that is the amount of the policy.  Further more their own appraisal report showed the cost of constructing the home new to be $80,000 less than the insurance policy covers.