Pentagon FCU Mortgage Complaint

Pentagon FCU Mortgage department,

Conventional fixed mortgage Settlement process and costs New York

PenFed ( Pentagon Federal Credit Union ) advertises " - Points '' - mortgage loans. In fact, this advertising is deceptive. PenFed charges " points '' disguised as " Loan Origination Fees ''. The initial ads ( attached ) state that the " - Point '' loan has an APR higher than the stated rate because of " closing costs '' ... which a consumer can interpret as the cost of appraisals, credit checks, filing fees, etc. In fact, the closing costs include a 1 % POINT called " Loan Origination Fee ''. The borrower gets no benefit from this fee. All of the costs associated with closing the loan are billed to the borrower. The APR is in fact NOT increased by closing costs ... it is increased by collecting a POINT. The proof that this is POINT comes when the borrower complains. PenFed offers to waive the " Loan Origination Fee '', if the borrower will accept a rate 1/4 % above the advertised rate. THIS IS E-ACTLY WHAT A POINT DOES!! This proves that paying the " Loan Origination Fee '' is in fact paying a POINT. Paying the POINT reduces the interest rate. Therefore, PenFed is either advertising rates that it is n't really offering ( you only get the - point rate by paying a point ... the true ( hidden ) - point rate is 1/4 % higher ) or it is lying when it says that the loan is " - points '' and lying again when they say the APR is linked to closing costs ... they add a point in the Closing Fees disguising it as a " Loan Origination Fee ''.