In recent posts I expressed frustration with USAA's mortgage service. First for a $50 fee per-property for pre-approval (I was negotiating on three properties, so the agent quoted me $150), then for their $350 fee to take an application and lock in a rate.

I don't believe in hogging the mic here at EquityScout, so it's only fair to give equal airtime to the response that I recently received from Chris Sandoval at USAA:

 Hello – this is Chris Sandoval with USAA. In addition to seeing your recent posts about USAA, we also received your letter detailing some pretty frustrating experiences you’ve had with USAA. I wanted to get in touch with you and your readers, and your blog seemed like the quickest way.

 

It looks like you have two main concerns stemming from your recent interaction with USAA:

 

 - A $50 fee to receive a mortgage pre-approval.

- A $350 application fee for a mortgage pricing quote.

 

 Regarding your first concern, we do collect a deposit to provide a true credit-approved pre-approval if you choose to do so over the phone – we do not collect this deposit when members seek a pre-approval on usaa.com (which most of our members choose to do). This deposit is applied toward a member’s cost when they close their loan with USAA.

 

 Regardless of whether or not you used our online pre-approval process, you would not incur a $150 charge for three pre-approvals. When we pre-approve a member, we approve the member’s credit in general. If I understand your situation correctly, you requested pre-approval for three properties by contacting us on the phone. This process should have incurred only one $50 deposit - again, the pre-approval process does not incur this deposit at usaa.com. I apologize if we did not accurately convey that to you at the time.

 

 In response to your second concern, members do not have to submit an application or a $350 fee simply to obtain a pricing quote. When members choose to apply for a mortgage with us (not when they ask for a quote), we do collect a $350 good faith deposit that is credited toward their costs at closing. This sort of deposit is common in the industry and is sometimes known as an appraisal fee or underwriting fee. Again, I apologize if we provided you with inaccurate information.

 

 I hope this information helps clarify some of the confusion caused by your latest correspondence with USAA. If you have any further questions, please don’t hesitate to contact me. Just log into usaa.com and use our secure message feature: click "Contact Us" and then click "Email Us." Start your message with "Attention Chris Sandoval, eCommerce" and paste in the URL of this blog post. I’m more than happy to help with any other questions you may have.

 

While we failed to win your recent mortgage, we value your business and the opportunity to serve all your financial needs.   ### end message

• No fee for online pre-approval; USAA only charges for pre-approvals given by phone. Fair enough, but the competition doesn't charge me to talk to them on the phone. This is an annoying policy and isn't investor-friendly.
• The $50 fee should have been a one-time charge instead of three seperate fees applied against three seperate properties. Again, not happy about paying a fee for a representative's phone time, but a one-time general fee is much more investor friendly than having to pony up for each property considered.
• No fee to "obtain a pricing quote." I'm going to interpret this to mean that USAA will be willing to give me a firm rate at no charge. Note that this isn't the story I got from the representative, who told me that she couldn't give me a firm rate unless I paid; that she could only give me a general idea.

I wrote recently about how I was annoyed at USAA's excessive fees for pre-approving a mortgage (fifty buck fee to fax me, their member of seventeen years, a mortgage pre-approval.)

Well I decided to give 'em another chance.  I actually want to be a USAA customer.  I've been with them for seventeen years.  So now that I have a property under contract I gave them a call for a quote.

Yeah, they'll quote me a rate.  But first I'd need to fill out an application for a $350 fee.  And if I don't like the rate?  That's fine - I could simply go with another lender and they'll keep my $350.

What?

So unfortunately this is the second and last strike for USAA as a mortgage lender (this ain't baseball).  Was hoping to be writing a happy post about how the company that serves our nation's servicemen and women came through in the end, but unfortunately it wasn't meant to be.  Oh well.   Looks like I'll be going with Wells Fargo (who I've also done business with in the past, and who treats me like a repeat customer.)

I’ve been a USAA member for seventeen years, since I was a junior at West Point (USAA is the financial institution dedicated to serving our Armed Forces). Great service. Always. That’s why I’ve stuck with them for all these years on an almost no-bid basis, and have done a number of mortgages there. 

I’m in the middle of a 1031 exchange – selling a property and putting the proceeds into a tax deferred account to invest in another property. I’ve done the sell part, now I need to buy something. 

I put offers in on three small multi-family properties this week and needed pre-approvals to submit along with the contract. So I called USAA. The fee to fax me three pre-approvals: $150 bucks. $50 bucks per property, which would be refunded only on those contracts that closed and were financed via USAA. 

I called PHH mortgage. They took my info and faxed me the three pre-approvals for free. And fast.  I’ll do the loans with them. 

Strikes me as peculiar that USAA would chase off a customer w/ great credit and a seventeen year track record. I wrote them a letter of complaint; I’ll let you know if I get a response.