Pentagon FCU Mortgage Complaint

Pentagon FCU Mortgage department,

Conventional adjustable mortgage (ARM) Application, originator, mortgage broker California

Our complaint is about Penfed not honoring its advertized policy of holding the loan rate unchanged, in spite of their agreeing to " lock the rate for 60 days ''. When I ( - ) made my first call to Penfed, in -, I enquired about the terms and conditions for a loan rate which they had advertised. I was told that besides the usual creditworthiness etc, there were - conditions. The loan should be a " conforming '' loan ( amount less than $410000.00 ), and there should be a 20 percent down payment. In a few days I called again to finalize the amount of the loan. I mentioned that based on the on the value of our house given by - ( $580000.00 ), 20 percent down ( $460000.00 ) would exceed the the first condition, so I was considering $410000.00. I then asked if, on the other hand, I were to request $400000.00 ( which would be 30 percent down ), would that lower the loan costs? I was told that it would not. The loan


So, we filed an application for $410000.00 and chose to " Lock the rate for 60 days ''. On - - we received an " Interest Rate Confirmation Agreement ''. More than a month later, - - - ), my wife received a mail saying that the house appraisal had arrived and that it was adequate. However, in a few days the interest rates went up, and they sent us a new loan agreement. While this new agreement nominally had the same interest rate, the other costs had dramatically increased by about $6000.00. I complained, and I was told that the costs had gone up because the appraisal was too low. I pointed out that while one can raise questions about the method of appraisal, it still satisfied the 20 percent criterion, and as a matter of fact, their first reaction to the appraisal was that it was " good enough ''. As a result of my protest the loan costs were slightly reduced, but they were still far higher than the original agreement. In a nutshell, in spite of promising a 60 day lock on the interest rate, effectively the rate was significantly increased. And in spite of a subsequent modification ( after our complaint ), it still stands quite a bit above the original agreement. We are enclosing the following : File 1 : The original contract File 2 : Letter indicating that the appraisal was " good enough ''. File 3 : Modified rate File 4 : Readjusted rate File 5 : Appraisal - and - - -