Fairport Savings Bank

We are in receipt of your letter of March regarding the complaint submitted to you on 2/27/assigned an ID number as noted aboveWe apologize for the inconvenience you experienced in attempting to contact usMsBhas been retired from Fairport Savings Bank for over ten years and there is no
specific successor who would automatically receive communications addressed to MsBWe immediately began investigating the situation and the specific issues which prompted Ms***'s complaintThe mortgage process, specifically for a construction/draw loan, covers a lengthy span of time and involves a number of different partiesIn this case, the ***s applied for the loan in April 2016, the loan originated in July 2016, and the final funds were not dispersed until February Unfortunately, it will take some time for us to interview all the parties involved, such as our Loan Officer, the attorneys involved, and the builders, to get a clearer pictureWe plan to conduct these interviews as quickly as possible and contact you again as soon as we have a better understanding of the issues which prompted Ms***'s complaintWe intend to issue our response following the guidelines you outlined in your cover letter by the end of this month (3/31/17)We hope this time line will be acceptable to youThank youSincerely, Jane VSenior Vice President, Compliance Officer

We have investigated our customers' complaints, which I believe can be itemized as follows: The mortgage is larger than they feel they can affordResponse: Throughout the process, all the required disclosures were provided, clearly showing the amount of the mortgage and the amount of each monthly paymentThese disclosures were signed by the customersIn underwriting the loan, the customers easily qualified for the monthly payment, per both our automated underwriting program and by our own manual processThey were not able to utilize their V A home loan benefitResponse: Fairport Savings Bank has a very popular construction loan program by which the loan is funded with incremental draws as the work progressesWhen it is fully funded, the loan becomes permanentThe VA does not have a construction-to-permanent programThe customers were certainly able to go elsewhere or choose a different loan program in order to use the VA benefitsThey had received a $36,gift from a parent, which they had hoped could be paid offal the time of the final drawResponse: We had indicated to the customers at the beginning of the process that their assets were not sufficient to enable them to build their houseWe suggested that they pursue obtaining a gift of funds from a third-party sourceWe have in the file a gift letter from the husband's mother and documentation that $36,from the mother's account was transferred to our customers' accountThe signed gift letter clearly states that the $36,is a gift and repayment is not expectedTherefore, there should have been no expectation on our customers' part that there would be funds available to pay the "gift" backThey claimed we did not take into account the $29,they already had into the propertyResponse: The value of the land, which they owned, was part of the overall appraised value of the homeThere was a prior mortgage on the land, which was paid off with the proceeds of the first draw at the time of the loan closingThey indicated they were never given the option to control the draw money being wired to the contractorResponse: Whenever funds were disbursed to the contractor, an email was sent either to our customer or to their loan officer to let them knowThe customers were asked to let us know if they had any questions or concernsThe manager of our Mortgage Department had offered to meet with the customers (and the builder, if necessary), but the customers did not accept his invitation to do soAt this point, it's not clear what else can be doneWe certainly apologize for the misunderstanding, but the documentation we have on file does not support any of the customers' claimsSincerely, Jane VSenior Vice President, Compliance Officer

I have reviewed the response made by the business in reference to complaint ID [redacted], and have determined that this does not resolve my complaint.  For your reference, details of the offer I reviewed appear below.
    1. Cannot
afford the mortgage. 
Every email I have from the disclosure
were said to be an estimation because of the fact that the builder and the bank
would not know until the build was completed how much it would actually come up
to; see attached.  My husband and I expressed our
comfortability level time and time again and the Mortgage officer reassured us
the disclosure amount was an estimation and we would have more than enough
funds coming back to us to place onto the mortgage, which was false. Regardless of what your qualifying monthly
payments stated, your customers were telling you and your business the entire
time what they could manage. Why would you want to get two people starting out
in over their head?
    2. Not
able to utilize the VA home loan. 
The ability to utilize the VA home loan
was not even researched by the Loan Officer from Fair Port Saving Bank. In fact we could have used the Bridge Load
process which would have went through Fairport Saving Bank and the VA home loans
would have fully reimbursed the build after completion. However, most Banks do
not want to go through this process because the VA Home Loan protects the
veteran through strict rules and government regulations, most banks (Fairport
being one of them) do not want to deal with a government agency because of the
strict set of policies. Had I known it was still an option I would have worked
with another bank besides Fairport to utilize my entitlement.  I was not told by Fairport that they did
not do Bridge Loans. I was told the VA home loans do not do construction loans
which is partly false.  
    3. The
gift loan. 
The gift loan was a debt paid with a debt,
our Loan Officer from Fairport suggested being that we couldn’t get an actual
gift loan of $36,000 from anyone that we take out a loan, write a check to a
family member, and show it coming out of their account. Which we did unhappily because
of the first meeting it was explained we had more than enough equity in the
land to utilize.  This should have never happened which is
why I am asking for this amount back and to be placed on the mortgage.
    4. The
$29,000 was what we had on our own into the land even with the standing
mortgage. However the gift loan should have been utilized to pay off the
remaining balance but Fairport insisted that they pay the remaining land loan
off and we come to the closing with $36,00.      5. We
never once were given the option to be courtesy copied in on the checks being
disbursed.   We never once received an
email from the contractor or the Bank when money was disbursed. Had we had that
happen, then we would have known we were going past the amount we were
comfortable with.
Even the final check was not disbursed to
us as it should have been. The contractor was given the final check and had to write
us a check back in return. This was fraudulent being that some of the work hadn’t
been completed and we would have held that as the rightful owner. See
attachment of check that was provided by contractor and not the builder.  The only notice I received of the money
being disbursed was Nov 2016 when the contractor was no longer in the house and
the Bank was still sending checks to them. See attached. We would not have met with the manager
because the checks had already been disbursed. The act had already been done
before the meeting was offered.
 
All the responses by Fairport Mortgage Bank were
created to justify their wrong doing. Please see all attached documentation and
email correspondence of all responses above. Fairport Bank and [redacted] tied our hands and as customers we were given no choice. We are not
looking to get a house for free, we are asking for what was rightfully ours. A litigation attorney will be getting
involved. I do not stand behind any of the actions that Fairport Bank had
responded with.
Regards,
[redacted]