This Nurse is Fighting Discriminatory Lending Practices - Ep. 60
During my recent home purchase I had a horrible experience with the inhouse lender, Pulte Mortgage. The terms of the loan offered were both predatory and discriminatory. Predatory lending is any lending practice that imposes unfair or abusive loan terms on a borrower. It is also any practice that convinces a borrower to accept unfair terms through deceptive, coercive, exploitative, or unscrupulous actions for a loan that a borrower doesn't need, doesn't want, or can't afford.
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TRANSCRIPT:
Naseema McElroy: [00:00:00] Hey, everybody the reason why I wanted to come on today was because I wanted to talk to you about my experience with my mortgage lender. So for the last couple of days, I've shown you, livs of my house. I'm moving this weekend. but my process like the builders were great.
my process with a mortgage lender was not fantastic. Like it was actually pretty bad. And for the first time ever, when I'm buying a house, the first time I bought a house, I was 21 years old. They didn't really have no business buying a house. I didn't have no money.
I didn't have no good credit, but I still bought a house anyway. when I bought my big old house in Brentwood, It was after I lost those houses, two houses, I lost to foreclosure two houses. I lost to short sale. And then I had a bankruptcy. And so it was a couple of years after I filed my bankruptcy that I bought my other house, went I.
I was pregnant, bought a big old house, was super delirious. and so after that I bought another house, but. I, that time I used my retirement funds for closing cost cutting and having cash. and then I bought another house a couple of years ago. Same thing while I had cash, but I wanted to put more down.
So I use my retirement fund, to do that. And this time, like I had it all together, my credit score was bangin. I had the money to put down like, no problem. Like I thought it was just going to be smooth and it was actually pretty bad. , what happened was, I went to go see a house that I really wanted a brand new, in the beginning of may.
And, I was like, cool. the, the agent. At the builder at the links, I was like, you know, if you go with our lender, we give you $10,000 towards closing. Like I usually have a lender. I was like, Oh, that's a no brainer. I'll go with your lender to get the $10,000. So, okay. So I start the process.
It says May 9th. I start in My application process then right away, like, when the us finally speak to the lender, he's like, Oh yeah, great. So we qualify you at 3.5%. I don't know, it was like, it's pretty high. Like , I don't think that's the rate I should get. He was like, yeah. I mean, like that's a pretty standard rate.
Actually, the rates are going whatever I was like. Hmm. Seems pretty high, but it was early in the process. So I didn't really trip cause I wasn't locking in that rate. also at first I was going to do an FHA loan, so I can only put 3.5% down because I just didn't want to put. That much money down. And he was like, no, you should do a conventional loan with 5%.
So I was like, cool. So I'm already coming up with an extra 2% and I'm in Northern California. So the housing prices, the median housing price is $700 something thousand dollars. So my house is in that price range just to, you know, so an extra 2% on that is. quite a hefty bit of money. And I was like, okay, I'll do the extra 2%, whatever.
So, you know May goes by, you know, submit everything that same day. I submit everything to the lender. I'm waiting, waiting, waiting the conditional approval was due for them on to the builder on June 1st. So June 1st comes. Yay. Congratulations. You got your conditional approval. Then on June 2nd, I get a call.
And they say, Oh, we pulled your conditional approval because, we see that you have a lawsuit here. And I was like, yeah, I have a lawsuit. here's all the paperwork, I'm the, plaintiff in the lawsuit. Here's all the information, so. Okay, cool. . So that, that was June 2nd, July 1st loan still not approved.
Okay. What's going on? I'll talk to The person. So this is may we're all the way into July. The person says, I talk to the person at the mortgage company. She was like, Oh, I tried to get them to the underwriters to approve, but they need a letter from your attorney stating all the lawyer's fees and all this kind of stuff.
And I said, listen, I'm not about to give you that, because at this point, first of all, you waited hella long to ask me for it. And I feel like it's unnecessary. I submitted the documents about the lawsuit. everything is in the contingency agreement. I don't think that I should give that to you. I think that you guys are asking for excessive information at this point.
And right now I'm actually kind of pissed off and I feel like you're prolonging my process. You already pulled my conditional approval and my loan is still not approved. I applied in early may. It is now the beginning of July. And I am ready to file a discrimination suit against you guys, because I feel like this is lending discrimination.
And I said, please don't correspond with me at all without getting a compliance officer involved in a compliance officer that has, a lens for diversity and inclusion, because I really feel like right now, you guys are playing games. So the next day I get a call from the compliance officer and the compliance.
Officer's really good. She was really compassionate. She like addressed all my concerns. And then she was like, Oh, I'm going to have the, the manager, the lending manager also reach out to you. So I was like, cool. So the lending manager, along with the lending agent reached out to me. And I'm telling them my concerns.
I'm telling them I'm concerned about the interest rate. I feel like they're delaying my loan and individually any delays in my loan could cause me to pay more fees or having a higher interest rate, not knowing where the market would go. If it causes me to, have a higher interest rate, then I really feel like they're putting me in jeopardy.
They should expedite the process as much as possible. And it's not even expedited because. It's a whole two months that have gone by and I haven't gotten approval. And I was telling, the guy about my concerns that this was, I feel like this is a form of discrimination. He was like, Oh, well, there's really no way we can discriminate against you because all we go by is your credit score and your down payment.
And I'm like, that's really interesting because aren't you guys under like, Federal housing laws like, like Fair housing, like why would you guys be under fair housing if there was no such thing as discrimination? So I was like, listen, that's like you saying racism doesn't exist. And it's not really my job to educate you on systemic racism in America.
But I think you should reach out to your higher ups for some additional training. And as a matter of fact, Please don't talk to me anymore because there's no way you can help me. And as a matter of fact, I don't think you should be managing anyone if that's not something that you understand, because you need to have an eye for that as well.
So obviously, yeah, he was through with me. So the compliance officer calls me back and I tell her again, what's going on? And I use an example from labor and delivery, and I say, you know, They say that people can't discriminate against you. Right? So there's therapeutic ranges for drugs that you can use to treat, say, hypertension in pregnancy, which can be fatal, right?
So you say the range is from 10 to 20 that you can give a patient. And if you, Continuously give 10 milligrams to one patient population and 20 milligrams to a different population. You're still in the same range. So technically you're not discriminating against them, but because of whatever unconscious bias you have, you choose to under that undertreatment for somebody or overtreatment for somebody else.
So you're still within those parameters. Right? So you see, see how that can kind of, those little ranges can cause. Issues. And they were like, yeah, I get it. I don't know. I think that, that's what he meant. And I was like, obviously you're making excuses for him and it's not cool. Like, I don't think that, he should be on my loan at all.
Anyway, so that was July 2nd is when I spoke to them. On July 6th, the lending agent and the processor, come back and they were just like, yeah, we're still waiting on approval. We just need some other things to make sure that you can call close. So I submitted some more documents and then on July six, I said F it.
So I applied for a new lender on July 10th I got a way lower interest rate. I got a 2.875 interest rate versus a 3.5% interest rate. and got my loan underwritten totally approved and underwritten in less than week. So I submitted this information to pull T and they were like, Oh that's, the mortgage company, obviously.
So that's the in house lender for the builder. So I was like, Oh, okay. So, Here's the, the rate that I got from this other company, I'm not interested in doing business with you guys anymore. And, I understand that. This is suppose to disqualify me for my builder incentive. But because you guys are offering me is such a horrible package and you haven't approved my loan yet.
I'm going to ask the builder for the credit. And so we commenced to submit the application, asked the builder for the credit and it was waiting for them. In the meantime, they were like, Oh, let's see, we can match it. And I was like, okay, whatever. You have all my information. All right.
See if you can match the rate. Okay. So they came back, they were like, Oh, we have good news for you. Okay. We can match your rate. And I was like, cool. So what's the whole cost of the loan. How much is the loan? Oh, well, if you're comfortable paying those fees or the other lender, then we matched her loan. I looked at their loan package and they had charged me an extra 10.
Thousand dollars just to match alone. So what they did was basically incorporated the incentive that I would be getting from the builder into the loan, which in itself is not competitive. How can you be market competitive? And you're taking an outside incentive and building that into your loan.
Therefore, that loan is not only. Not make it mean the market standards it's predatory at this point, because all you're telling me, because predatory, let me, let me tell you what the definition of predatory is.
the definition that I told him a predatory lending was that any lending practices that impose unfair or abusive long-terms terms on a borrower. Unfair: the initial rate that was offered was 3.5%, which is far above the market rate for my credit income and down payment. This was proven by the 2.875% interest rate that I got from an outside lender.
Predatory lending is deceptive, coercive it exploits you and it's unscrupulous. Okay. So the delay in the approval process could have force me to be in a position where I had to accept an unfavorable loan as I was contractually obligated to close on this loan because now.
Though they have dragged me along to the point that I couldn't get out of this contract with this builder, or I would have to pay a 3% penalty, which is about $40,000, just to not have a house. Okay. alright. So it was deceptive and coercive because when they offered me the new rate that the rate match, they included the $10,000 in fees that they would have gotten.
From the builder. Okay. And then they tried to say that, if I didn't take this loan, then I would be in a bad position because I would lose that $10,000. So they're now trying to convince me that I need to take this loan, or, you know, I'm losing this money, so that's coercive and you cannot be coercive in lending.
And so that's what I sent them. And, So where I'm at right now is I sent that information off to the builder. And I was like, listen, I really think that you guys should grant me this builder credit because number one, like I said, they offered me alone. That is, unfavorable and they still haven't approved me.
So they had my application from. May 9th to now July 31st at this point , all that time. you don't have an approval decision. So I told them, I think that they need to, Give me the builder credit, or if they're saying the only reason why I can get the only way I can get the builder credit is to accept this loan.
That means that they're complicit and this process of, predatory lending. And you know, I'm going to take action. So as ofthis point, They have not offered me a bill to credit. Now I'll go sign my documents. Today is the 25th. My documents are due to be signed on the 27th. We shall see, but my lawyer has already been updated and ready to take action.
So these are the things that you should know. Okay. So if this ever happens to you, the first thing that you need to do is. Before you sign any kind of loan documents, go with it in house lender, whatever, have up free approval with a bank that you trust. And also compare like when you shop for a mortgage, you can get multiple mortgage quotes, even though they do a hard inquiry within a 30 day period.
And it only counts as one point shop as many as possible. And look, get the truth in lending statement and go line by line. And you ask these people, is this the best that you can get? You'll start to see that they all, they have varying fees and varying rates based on your credit score. Look at those and pick the company that you're most comfortable with and work with them.
Now, in this instance where you have an incentive to work with a builder, you take that most favorable rate. And then you tell them that that's what you have. And then you get them to match that. Okay. If they don't match that, then you have some, you have caused to take action against them.
Like I am. So if they still aren't working with you, you can contact a lawyer like I have done, and you can reach out to the, The CFPB. So the consumer finance protection Bureau, you file a dispute, with the court super finance protection Bureau. And there's also some other bureaus that I'm going to listen to information too, but that's how you feel, right?
discriminatory lending. it still exists. It's still very prevalent and. I just want you guys to be aware of the signs, so it doesn't happen to you. So I hope that you take this information and you're able to apply it in your life. I hope it doesn't happen to you, but if it does, you can be more proactive about preventing it.
Hey there I’m Naseema
My dream is for everyone to know that financial independence is attainable with a little intentionality. Learn how I can help you finally break the cycle of living paycheck to paycheck.
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