My Predatory Lending Fight with SunTrust

I waited as long as I could.  I thought SunTrust was negotiating in good faith.  I don’t believe that anymore.  Below is a copy of the complaint portion filed with the Massachusetts Division of Banks and Massachusetts Attorney General.  I maysend it directly to Martha Coakley.  There is actually a bit more since I sent the complaint, including a check I obtained which showed I paid closing costs.  I know it is a long read, but please do.  Would love to hear some serious comments.

****SUMMARY****
On Sept. 14, 2006 SunTrust Mortgage Inc. originated a Massachusetts High Cost Home Loan. They violated several high cost home loan laws and regulations in the origination of this loan. I was never offered credit counseling in regard to this high cost home loan. Further, SunTrust never verified that the loan was affordable.

When SunTrust discovered they originated a high cost home loan they proceeded to cover it up. SunTrust did not notify me of the high cost home loan and forced me to refinance against my wishes and steered me into a loan even though I have proof that I qualified for a better rate. My original loan officer even said that I could refinance BOTH loans into a better rate. They only refinanced the second loan even though this loan was originally closed as an 80/20 combination loan.

Recently SunTrust told me that I was completely reimbursed for the original high cost home loan, however this money was used to pay the closing costs and finance charges of the new refinanced loan. However, at the time I was told SunTrust was to pay the closing costs. SunTrust fraudulently listed these fees as POC and also listed as paid by SunTrust on the HUD1. These funds were not paid by SunTrust; they were paid by me from my “complete reimbursement. If I had known that I was getting reimbursed for a high cost home loan, I would have never allocated these funds to refinance for such a small savings.  I now have a cashiers check that was paid to me by SunTrust and then used to pay closing costs.

**SunTrust states that SunTrust provided me with a check that paid closing costs. IN OTHER WORDS I PAID THE CLOSING COSTS!

Since these finance charges were not properly itemized and/or were not bonafide finances charges (as they were paid part of the previous loan transaction) they should have all be included in the amount finance charge which cause the APR to be another Massachusetts high cost home loan. This error resulted in an incorrect APR and finance charge. The APR and finance charges were outside of the tolerance for rescission.

I was given the right to rescind the second mortgage at closing as legally required. Since the APR was incorrect and outside the tolerance for rescission the right to rescind was extended. I notified SunTrust that I wished to rescind the loan. They denied that I still had the right to rescind.
This loan 100% no money down (80/20 combo) mortgage. It was a no income verification mortgage. The note rate and terms of the original mortgage was as follows:
2006 First Loan- $256,000 @7.25%
2006 Second Loan - $64,000 @ 15.625% (high cost home loan)
The loan that I was forced to refinance into had the following terms.
$63,967 @ 13.625%

****MORE DETAILED DESCRIPTION****
- I bought a house on 9/14/2006 with 80/20 stated income combination loan. Both loans were originated through SunTrust Mortgage. The interest rate on the first mortgage was 7.25% The interest rate on the second mortgage 15.625% (high cost home loan)

- I was called by Steve Gilbert, regional operations manager for SunTrust, 5 months later (end of Jan. 2006/beginning of Feb. 2007) and told there was an error on the second loan and SunTrust was going to refinance me as result of this “error.” SunTrust never asked me any of my new information and I never filled out an application for this loan. They never asked for my income and never ran my credit report. They also did not update the appraisal. The loan officer on the original documents was Jeff King. I never talked with Jeff King and still have no idea who he is.
They set an appointment for me for a closing at their attorney’s office. I later decided that something did not seem right and I did not want to refinance. I also did not want the new mortgage on my credit report which would hurt my credit rating. Steve Gilbert’s response was that it would not hurt my credit rating, which is not true.
I informed that I DID NOT WANT TO REFINANCE and proceeded to cancel the closing appointment. I was then called and then told that I HAD to refinance. I had no idea why. They never told me what the error was. I was a first time home buyer and scared that the bank could take my house if I didn’t refinance. I attended the refinance by myself without any representation at their attorney’s office. SunTrust forced me to refinance to cover up their error.
- This loan was not in my best interest. Despite what any form might say, this loan was not in my best interest for the simple fact that I did not want to refinance. The process should have stopped there (further evidence why this was not in my best interest below.) Also, when determining whether the loan was in my best interest, they did not take into account all the fees that I paid at closing (even though it was labeled, paid by SunTrust, I in fact paid them as part of the 2006 high cost home loan full reimbursement)
- I later would do research and find out the error they made in regards to this loan. This was a Massachusetts High Cost Home loan. I never received any high cost home loan disclosures nor was I told that counseling was required to close this loan.
- SunTrust recently stated that I was completely reimbursed for the 2006 high cost home loan (as required by MGL 183c.) However this reimbursement was used to pay closing costs. At the time of the refinance closing, I was told that SunTrust was paying all closing costs. The finance charges are listed as “Paid by SunTrust” and POC. However, I paid these finance charges! Since none of these charges were properly itemized and/or paid at the original closing, they should be included in the APR. When you include all funds that would constitute a “full reimbursement” it results in another HIGH COST HOME LOAN! SunTrust refinanced a high cost home loan with another high cost home loan!
This original transaction was a combination loan; however they only refinanced the subordinate lien to 13.625%. Since this was a combination loan both loans should have been refinanced. This permanently damaged both loans by their fraudulent actions, as now any other loan will be considered a cash-out refinance, which carries higher fees and/or interest rates. In many circumstances I will be unable to refinance. In fact the new refinanced second loan was under the “EZ Two” loan program offered by SunTrust, which was a combo second program. How can they only close a combo second without a first?

- SunTrust has altered federal documents. I just received the HUD1 settlement statement that they have in their files. This was different then the HUD1 that was at the closing. There was an item deleted on the HUD1. SunTrust also altered the rate lock agreement.
- The application for the 2007 second mortgage makes it appear that the new loan is to be in first position, and the original first loan would be moved to second position. The application doesn’t show the original first loan in places it should be shown. I believe they did this to make the new 2007 second mortgage appear as if it was the only mortgage in order to get the loan to close.
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I have documents that I believe show this loan was not underwritten to the policies they had in place. For example, at the time of this loan, the EZ2 program required a MAX LTV of 80%. However a new appraisal was never done and the original appraisal was used. The original appraisal showed a LTV of 100%! Also the day after the loan closed, the loan program that this loan was written under (EZ2) ended.

- I never applied for this new 2007 second loan. The initial application stated that I talked to a Jeffrey King; however I have no idea who Jeffrey King is. I have never spoken to Jeffrey King. At the closing the application was significantly different and had a completely different loan officer. I never talked to anyone in regard to this loan; they simply filled my info out for me without my consent.

- The only reason they refinanced was to get the loan off their books. They should have refinanced both the first and second mortgage loans as it was a combo loan. The first loan is permanently poisoned as it will cost more to refinance because it will be considered a cash-out refinance. There is damage to my credit report as now it shows a loan that after 5 months was closed and a new one open. SunTrust didn’t follow the requirements in MGL 183c in attempting to remedy the loan.
- SunTrust included a right of rescission as required at the 2007 closing. Due to TIL violations and lack disclosures the right of rescission was extended. (see enclosed rescission and SunTrust’s response)I notified SunTrust that I wish to rescind the loan. They responded saying I did not have a right to rescind. However in the response they admit that I did have the right to rescind at loan consummation, and then they later admit that the TIL documents are in fact incorrect (rescission and response enclosed)

-SunTrust is now attempting to foreclose on the second mortgage, even they have no right to do so, as the loan was rescinded. They are also reporting the loan to the credit bureaus as late. They no longer have the right to report on the 2007 second loan to the credit bureaus as it has been rescinded.
-Recently I have attempted to modify my loan under the making home affordable program. According to my research I qualify. When I first applied I was employed, however recently I lost my job. According to Fannie Mae, unemployment income is accepted. SunTrust refuses to accept this income.  They have since agreed to accept my unemployment income as required, but now they are coming up with some excuse as to why my rental income can’t be used.
To summarize, SunTrust originated a high cost home loan, attempted to cover that high cost home loan by steering me into another high cost home loan. This new loan was not in my best interest and I did not wish to refinance. They altered documents. They did not allow proper rescission of this loan. They violated several state and federal laws.