Furious

low·ball [loh-bawl]
–verb (used with object)
2. to deliberately estimate a lower price for (a service or merchandise) than one intends to charge: to lowball the cost of a move.
3. to give a false estimate or bid for.
Definition from Dictionary.com.

lie [lahy] - noun, verb, lied, ly·ing.
–noun
1. a false statement made with deliberate intent to deceive; an intentional untruth; a falsehood.
2. something intended or serving to convey a false impression; imposture: His flashy car was a lie that deceived no one.
3. an inaccurate or false statement.
4. the charge or accusation of lying: He flung the lie back at his accusers.
–verb (used without object)
5. to speak falsely or utter untruth knowingly, as with intent to deceive.
6. to express what is false; convey a false impression.
Definition from Dictionary.com.

Dear USAA Federal Savings Bank,

Today, you lost a customer. I feel betrayed and embarrassed that I placed my trust in you to finance my mortgage. I've been a USAA customer for over 14 years, and a USAA Federal Savings Bank customer for over 10 years. I've had two previous home mortgages through USAA.

Our realtor wanted us to use a local mortgage broker that she works with on a regular basis. I talked at length with the local mortgage broker and with the USAA loan agents to ask about policies, fees, rates, and closing costs.

The local mortgage broker told me that because my credit score was less than 720, that he was required to charge me an additional 1/8% on my annual interest rate. He assured me that this was standard practice and that when I looked at the rates on any other bank website that I would have to add 1/8% due to my credit score.

That sounded odd to me, and I wanted a second opinion. I called the USAA loan agent and asked: (1) Is it true that all banks will add 1/8% due to my credit score being less than 720? (2) Does USAA practice the same policy of adding 1/8%? His response was, "No, that is not true, and no, USAA will not add 1/8% to your interest rate due to your credit score." I trusted and believed him because I thought USAA would look at my credit report and understand the ridiculous circumstances that lowered my credit score less than 720.

All that being said, I set aside the questions about the interest rates and just compared the bottom line on the Good Faith Estimates from USAA and from the local mortgage broker. USAA's closing costs were $2,200 lower, and USAA's monthly payment was $38 less than the local mortgage broker's payment. The difference in monthly payments wasn't significant enough to sway my decision one way or the other, but the closing costs were.

Our realtor expressed concern that the numbers on the USAA estimate were not accurate and to verify. I didn't want to blindly jump on the USAA band wagon without understanding the reason why there was such a big difference in closing costs. One of the biggest factors was the difference in county taxes. So I called the USAA representative and asked him about the differences line item by line item. He kept reassuring me that of course USAA was going to be lower because USAA didn't have any hidden fees and we're not brokers out to make money - we're here to support YOU. When I very specifically asked about the county taxes, he replied to me on the phone and in an email, "we stand by our estimate."

Based on my history with USAA, I trusted you, and I chose to obtain my mortgage through USAA.

The first episode that challenged my trust in USAA was the phone call that made it clear to me that USAA had thrown me a lowball estimate to lure my business. The loan processor called and informed me that the closing costs were going to be $3,100 more than the original "good faith" estimate, due to things such as the county taxes. I voiced my displeasure with this, and the loan processor said she would run the numbers again and call me back.

After recalculating, she called me back with a new estimate of closing costs that was only $1,200 higher than the original estimate. I told her I still found that unacceptable since I had specifically brought this to the attention of the loan agent when I applied for the loan and he assured me the estimate was correct and "we stand by our estimate." The loan processor was terribly apologetic and said in order to keep my business, they would offer me 0.xx points or $962.50 off at closing. It didn't make up for the entire $1,200 difference, but it was most of it, and I acknowledge that there is some amount of variability in an "estimate."

That episode left a bad taste in my mouth. If my books weren't all in cardboard boxes on their way to Virginia right now, I would pull out my Social Psychology textbook and cite the chapter and page number about high pressure sales tactics and lowball estimates. This episode smacked of a classic lowball case study.

Everything was all set for closing escrow at the end of the month. My wife and I have just been watching the interest rates in order to decide when to lock-in our interest rate. Both the initial loan agent and the subsequent loan processor recommended we sign up for USAA's Rate Watch service that would email us the current interest rates every day. The emails tended to be slow, so I usually ended up checking on the USAA website.

The second and most recent episode that has destroyed my trust in USAA happened this morning. My wife and I decided the time was right, or rather the interest rate was right at 6.5%, and that I should call USAA to lock in my interest rate.

I called and told the USAA representative that I would like to lock in our interest rate. She was very cheerful and happy to help me, and said, "Let's take a look at what the rates are today." She proceeded to tell me that today's interest rate was 6.625%. I said, "Why is the interest rate you are telling me different from the interest rate on the USAA website?" She had to put me on hold to look into it, but when she came back on the line, she said it was because my credit score is less than 720, so they are required to charge me an additional 1/8%.

Saying that I lost my temper would be putting it mildly. I was absolutely furious. My hands were shaking I was so mad. The loan agent who convinced me to obtain my mortgage loan through USAA absolutely lied to me. The loan processor told me she would need to go review my file and call me back within the hour. I allowed her to go do her research while I let my temper cool off.

When she called back, she said she had reviewed my file and spoken with the loan agent. She tried to tell me that he didn't lie to me. She said it was because the interest rate he quoted me on the phone when we first talked already included that additional 1/8%, he was supposedly being truthful with me and telling me exactly the interest rate I was going to get.

She didn't get it.

I specifically asked him, "Does USAA add 1/8% to the interest rate because my credit score is less than 720?" He said, "No." Please tell me, how is that NOT lying? Plus, at NO point when the loan agent or the loan processor recommended that I sign up for the USAA Rate Watch program did EITHER of them say, "You will need to add 1/8% to the published interest rate because your credit score is less than 720."

That loan agent most certainly, flat out, absolutely, 100%, unequivocally, obviously, and unmistakenly

LIED TO ME

about the interest rate and

LOWBALLED

the initial "good faith" estimate in order to lure me in to choosing USAA over the other bank.

The loan processor was unwilling to acknowledge that the loan agent had lied, and she would not offer any other compensation for the difference. Her justification was that the closing costs now are the same as the closing costs on the good faith estimate (the updated one, after they fixed the lowball). I told her this wasn't about the closing costs. This was now about the interest rate and the subsequent monthly payment.

Looking at the table of interest rates and points on the USAA website, I saw that it cost 0.5 points to lower the interest rate 0.125%, so I suggested that she give me the 6.5% that is advertised on the USAA website and not charge me the 0.5 points. She said there is no way she could do that because she had already given me 0.xx points off. My rebuttal was that 0.xx points off was to compensate me for the initial lowball estimate and didn't have anything to do with the loan agent lying to me about the interest rate, but she refused to budge.

Luckily for me, the loan agent at the local mortgage broker was very understanding when I called him today. He still had all my pre-approved loan paperwork and said he would have no problem achieving our desired closing date. I obtained a new good faith estimates from both USAA and the local mortgage broker, and the local mortgage broker's interest rate, monthly payment, and bottom line closing costs are all lower than the updated USAA estimates.

Since USAA has violated my trust by lowballing me and lying to me, I am cancelling my loan application with USAA, and I'm going with the local mortgage broker.

In my previous blog post on this topic, I did not mention the name of USAA Federal Savings Bank, because I was giving USAA the benefit of the doubt. I assumed it was an isolated incident, and I didn't want to publicly criticize the bank for an isolated incident.

Now that it is clear to me from speaking to multiple personnel at USAA that USAA was not interested in maintaining me as a customer and unwilling to put their money where their mouth is. I am writing this as an open letter on the internet so that others can learn from my experience and be wary of future business dealings with USAA Federal Savings Bank.

Your absolutely furious and formerly loyal customer,
Kevin