Complaints

This profile includes complaints for MegaStar Financial Corp.'s headquarters and its corporate-owned locations. To view all corporate locations, see Find Local Branches.

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• 

  MegaStar Financial Corp.

  1080 Cherokee St Denver, CO 80204-4039

  
• 

  1st City Mortgage Group - A Subsidiary of Megastar Financial

  3615 Mitchell Dr Fort Collins, CO 80525-5913

• 

  1st City Mortgage Group - A Subsidiary of Megastar Financial

  3615 Mitchell Dr Fort Collins, CO 80525-5913

The complaint text that is displayed might not represent all complaints filed with BBB. Some consumers may elect to not publish the details of their complaints, some complaints may not meet BBB's standards for publication, or BBB may display a portion of complaints when a high volume is received for a particular business.

• Initial Complaint

  Date:02/25/2025

  Type:Sales and Advertising Issues
  Status:

  AnsweredMore info

  Complaint statuses

  Resolved:

  The complainant verified the issue was resolved to their satisfaction.

  Unresolved:

  The business responded to the dispute but failed to make a good faith effort to resolve it.

  Answered:

  The business addressed the issues within the complaint, but the consumer either a) did not accept the response, OR b) did not notify BBB as to their satisfaction.

  Unanswered:

  The business failed to respond to the dispute.

  Unpursuable:

  BBB is unable to locate the business.

  I am currently trying to remove my private mortgage insurance. My loan is just shy of being at 80% of my homes original evaluation of ($365,000). I am currently at $293,000 and should be $1000 away from the required $292,000. They state it is 80% of the original appraisal evaluation or the original purchase price ($351,500), whichever is lessor. This is an unfair and deceptive lending practice. Professional appraisals evaluations are based on the original value of the home and the collateral for the loan. Private mortgage insurance has nothing to do with the purchase price since there are many more variables that go into the purchase price. This deceptive company is requiring me to pay an additional amount of $11,162 to get my mortgage insurance removed on a baseless corrupt principle. This is the 2nd significant financial issue I have had with this company. This is an exact definition of deceptive and unfair trade practice. I have had no missed/late payments since the loan began.

  

  Business Response

  Date: 03/10/2025

  
  March 10, 2025
  
  
  
  ***********************
  
  
  Re:      Case number: ********
  
  To Whom It May Concern:  
  
  We have received your correspondence dated February 25, 2025, pertaining to Case Number ********. We understand the borrowers concerns and take this matter seriously. We have conducted a thorough review of the circumstances cited in this case.
  
  Based on the information the borrower provided, we have reviewed their account and have resolved their concern.   On February 21, 2025, we mailed a letter advising the status of the borrowers Private Mortgage Insurance (PMI) waiver request. The letter advised that to remove PMI,their loan must satisfy all investor and state requirements. While we are unable to provide personal financial information, we would like to share the steps taken to resolve the borrower's issue. Here is a summary of our response and any new information: 
  
  Additionally, the letter advised that their Loan to Original Value (LTOV) must be at 80% or less to qualify for PMI removal based on the Original Value. Investor requirements indicate we use the lessor of the original appraisal evaluation or the original purchase price in this evaluation.
  
  Our review of the loan determined that no servicing errors related to PMI removal. The borrower has a right to receive a copy of the documentation we relied upon to reach this conclusion.This documentation has been provided to the borrower for their convenience. 
  
  Should you require additional assistance, or wish to dispute the outcome of our review, please contact us in writing at MegaStar Financial Corp., ***************************************
  
  Should you have any questions regarding this matter, please contact me at ************.
  
  Sincerely,
  
  ****** *.
  Executive Resolution Specialist 

• Initial Complaint

  Date:05/21/2024

  Type:Order Issues
  Status:

  AnsweredMore info

  Complaint statuses

  Resolved:

  The complainant verified the issue was resolved to their satisfaction.

  Unresolved:

  The business responded to the dispute but failed to make a good faith effort to resolve it.

  Answered:

  The business addressed the issues within the complaint, but the consumer either a) did not accept the response, OR b) did not notify BBB as to their satisfaction.

  Unanswered:

  The business failed to respond to the dispute.

  Unpursuable:

  BBB is unable to locate the business.

  MEGASTAR FINANCIAL, IS PURPOSELY MOVING THE GOALPOST OF REMOVING *** FROM MY MORTGAGE SO THEY CAN CONTINUE TO GET MORE MONEY FROM MY MONTHLY PAYMENT. THEY GROSSLY UNDER REPORTED THE VALUE OF MY HOME SO THAT THEY CAN KEEP THE *** IN PLACE. FURTHER ONCE I WAS UNDER THE 80% THRESH HOLD THEY THEN TOLD ME I NEEDED TO BE AT 75% LTV FOR REMOVAL.

  

  Business Response

  Date: 06/04/2024

  ********************;
  Your recent Interior BPO (Broker Price Opinion) indicates an estimated market value for your property of $XX.**, giving you an LTV of *****%. We regret to inform you that this value does not qualify your loan for PMI removal by way of an appraisal per ****** *** (who owns your loan). This value will be valid for 4-months effective the date of the inspection. The pay down amount as of today would be $12,922.02. You will have the same 4-month window to pay down to your respective LTV below.
  If you are able to pay the amount described above, please send a personal or cashiers check and a request to remove PMI to
  
  MegaStar Financial Corp.
  Attn: PMI Department
  PO BOX 77412
  ***************
  
  Valuation Appeal: If you feel as though the valuation does not accurately represent the value of your property, you have the option to submit an appeal request. To appeal the valuation, you must complete the appeal form attached to this email and return to PMI-*************************************** Upon receipt of the completed appeal form, we will submit the appeal to the Investor (****** ***) for you. Please be advised that all appeals must be submitted within thirty (30) calendar days of the date of this correspondence.Appeals received after thirty days will not be honored.
  Please Note: You must wait 120 days from the completion of the valuation to order a new valuation for PMI removal.
  Please let us know if we can be of further assistance.
  Thank you and have a great day,
  
  PMI/MIP Administrator-ANG
  Mortgage Insurance Department
  Cenlar Bank,FSB

• Initial Complaint

  Date:02/01/2024

  Type:Order Issues
  Status:

  AnsweredMore info

  Complaint statuses

  Resolved:

  The complainant verified the issue was resolved to their satisfaction.

  Unresolved:

  The business responded to the dispute but failed to make a good faith effort to resolve it.

  Answered:

  The business addressed the issues within the complaint, but the consumer either a) did not accept the response, OR b) did not notify BBB as to their satisfaction.

  Unanswered:

  The business failed to respond to the dispute.

  Unpursuable:

  BBB is unable to locate the business.

  Escrow refund account for a joint tenant mortgage (divorce). Both parties contributed ***** to the account and both names are on the title, mortgage, deed, and check. The company refuses to send separate checks to the separate parties. The company is forcing me to speak with the other party after an abusive divorce. The company sent the check only to one person and not both. The company refuses to remedy the situation or provide me with my $933.05 that is effectively stolen from me.

  

  Business Response

  Date: 03/06/2024

  After a review of the loan regarding the filed complaint and the issuing of an escrow check to two individual parties, we found that the escrow check in question in the amount of $1866.09 has been cashed.  We have provided a copy of the negotiated check for your review.  
  
  Please note that in order to issue two checks and split the monies in half, we require that either borrower provides the final divorce decree.  The final divorce decree would have to state that both parties were entitled to the escrow funds.         
  
  A review of the loan does show that our servicing center was not provided with the final divorce decree. Therefore, the check was issued in both names as noted in the Promissory Note.  While we understand that the borrowers were entitled to 50/50 of the funds we are not required to split funds based on a verbal or written request without a final divorce decree.      
  
  The following is our process regarding issuing a check different name(s)    
  
  Common Reasons a Check May **** to be reissued
      Deceased - Borrower has passed away there is an assigned Executor of Estate or Executrix.
      Divorce Decree - a legal document that specifically states that the party is entitled to any escrow monies associated with the property.
      Name Change - The Borrower has changed their name since the check was issued.
      SII - Confirmed Successor in Interest (SII).
  
  The following is the timeline of events regarding the check:
   
      On December 13, 2023, escrow refund check ****** for $1,866.09 was released.
      On January 5, 2024, escrow refund check ****** for $1,866.09 was returned.
      On January 8, 2024, escrow refund check ****** for $1,866.09 was sent to ************************************************************
      On January 9, 2024, *************************** contacted us and stated the escrow check had been sent to the incorrect address, and requested to send the check to ************************************************************************. A work order was opened.
      On January 12, 2024, the mailing address was updated online.
      On January 24, 2024, check ****** for $1,866.09 was released.
      On January 30, 2024, ******************************* contacted ** to update the mailing address. ******** was advised that the primary mailing address was for **********************************. ******** stated that she thought that we would be sending out two (2) separate checks and requested to verify if there was something that could be done. ******** was advised that the escrow check had been mailed to the address on file.
      On February 2, 2024, escrow check ****** for $1,866.09 was endorsed.
  

• Initial Complaint

  Date:12/04/2023

  Type:Order Issues
  Status:

  ResolvedMore info

  Complaint statuses

  Resolved:

  The complainant verified the issue was resolved to their satisfaction.

  Unresolved:

  The business responded to the dispute but failed to make a good faith effort to resolve it.

  Answered:

  The business addressed the issues within the complaint, but the consumer either a) did not accept the response, OR b) did not notify BBB as to their satisfaction.

  Unanswered:

  The business failed to respond to the dispute.

  Unpursuable:

  BBB is unable to locate the business.

  On 08/21/2023 Megastar contracted my company Appraisal Express, LLC to do an appraisal on a residential property, they were going to use in a mortgage finance transaction. Their customer subsequently made a false claim/review against my company, and Megastar will not return my calls or email inquiries. I made Megastar aware of the following below in Quotes, per my phone call and Inquiry through their website, and have not received a response in more than 14 days. The lender is aware that they are my Client, and unless their Customer is making the claim/review on their behalf, it is not their liability, and it is in their best interest to have their Customer remove it."Notice to Lender(s):Please circulate this message to others in your organization.This message is provided as a cautionary explanation about what some real estate brokers/agents will do when an appraised value does not equal or exceed a contract price agreed to by the seller and buyer. I am providing this info because the described action below is illegal, and the lender could become a party to the illegality if the lender allows the described activity to be done.The appraiser has no responsibility to any of those parties (seller, buyer, listing broker, selling broker) when the assignment comes from a lender client. ************** duty is to protect and act in the best interest of the lender, and to appraise the property commensurate with a supported market value as documented by multiple neighborhood property sales evidence as shown in the appraisal. There are times when there is no justification for reporting an appraised value at or above the contract price.Some real estate brokers/agents become belligerent when this happens. They will often complain to the lender and berate the appraiser. In some cases, the broker/agent will ask the lender to restrict ************** ability to perform future appraisals when that broker/agent is involved with another transaction. In extreme cases, the broker/agent will put a statement into a listing which attempts to forbid the appraiser from doing an appraisal on the listed property.Please take great care to comply with the ******************* federal law, laws of the States, GSE, FHA, VA appraisal guidelines, and real estate association and MLS rules which are crafted to allow independent appraisers to do their work without intimidation or coercion, or by being restricted from any future assignments.If brokers/agents ask the lender to be a participant in any such activity, and the lender capitulates and does not support appraiser independence, the lender could become directly involved with illegal activity.Appraisers are beginning to file complaints and initiate lawsuits against brokers/agents and lenders when they learn that they have become a target of this action.This is a portion of the ******************* law concerning appraiser independence:15 U.S. Code ****e Appraisal independence requirements (a) It shall be unlawful, in extending credit or in providing any services for a consumer credit transaction secured by the principal dwelling of the consumer, to engage in any act or practice that violates appraisal independence as described in or pursuant to regulations prescribed under this section.(b) Appraisal independence For purposes of subsection (a), acts or practices that violate appraisal independence shall include(1) any appraisal of a property offered as security for repayment of the consumer credit transaction that is conducted in connection with such transaction in which a person with an interest in the underlying transaction compensates, coerces, extorts, colludes, instructs, induces, bribes, or intimidates a person, appraisal management company, firm, or other entity conducting or involved in an appraisal, or attempts, to compensate, coerce, extort, collude, instruct, induce, bribe, or intimidate such a person, for the purpose of causing the appraised value assigned, under the appraisal, to the property to be based on any factor other than the independent judgment of the appraiser;(2) mischaracterizing, or suborning any mischaracterization of, the appraised value of the property securing the extension of the credit;(3) seeking to influence an appraiser or otherwise to encourage a targeted value in order to facilitate the making or pricing of the transaction; and (4) withholding or threatening to withhold timely payment for an appraisal report or for appraisal services rendered when the appraisal report or services are provided for in accordance with the contract between the parties.Thank you for your cooperation, and for supporting appraiser independence."I have been in this industry almost 30 years, and this is a blatant disregard for ethics and the rules involved.Thank you.*****************************

  

  Business Response

  Date: 12/12/2023

  ****************,
  
  Thank you for bringing this to the attention of MegaStar Financial.
  
  MegaStar Financial placed an order for an residential appraisal through the ***************.  The Mercury Network then randomly selected Appraisal Express, LLC from the active appraisers in the area of the subject property.  This is done in compliance with Federal and state laws and regulations surrounding the appraisal ordering process such as the Appraiser Independence Requirements.
  
  MegaStar Financial does not have any knowledge of what occurred between Appraisal Express, LLC and MegaStar Financials client and therefore has no comment on the situation between the two parties.
  
  MegaStar Financial is abundantly clear on the various Federal and state laws and regulations surrounding the appraisal process. MegaStar Financial is also aware that it is illegal to persuade, cajole or untowardly influence a person to give a false or fake review; so, it will not be contacting its client regarding this matter.
  
  Again, thank you for bringing this to MegaStar Financials attention.

  Customer Answer

  Date: 12/12/2023

   
  Better Business Bureau:
  
  I have reviewed the response made by the business in reference to complaint ID ********, and find that this resolution is satisfactory to me.
  
  Sincerely,
  
  ***************************

• Initial Complaint

  Date:08/22/2023

  Type:Order Issues
  Status:

  AnsweredMore info

  Complaint statuses

  Resolved:

  The complainant verified the issue was resolved to their satisfaction.

  Unresolved:

  The business responded to the dispute but failed to make a good faith effort to resolve it.

  Answered:

  The business addressed the issues within the complaint, but the consumer either a) did not accept the response, OR b) did not notify BBB as to their satisfaction.

  Unanswered:

  The business failed to respond to the dispute.

  Unpursuable:

  BBB is unable to locate the business.

  I applied for a home loan with this company 2 months ago and completed all necessary steps to obtain a pre-approval letter with a locked-in interest rate. I never received it and when I informed Megastar of this issue, I was given the runaround.

  

  Business Response

  Date: 08/31/2023

  Dear **************;
  
  Thank you for expressing your concern.  I have looked into the history of your loan application.  With regard to your lock, MegaStar Financials company policy nationwide requires the borrower be under contract and/or owns the property they are refinancing prior to locking the loan  We use the value of the property to determine the loan amount along with other specifics such as property type to determine rate and price.  Other factors for rate and price are the loan qualifications, but the property is an important part of the product qualification and rate/price.    
  
  ***** and his branch manager ************************* have been with MegaStar for over 10 years and have always provided great customer service.  I know them to be top professionals who care deeply for their clients.  I am so sorry to hear your experience with ***** is not aligned with his history.  It disappoints us you are not a satisfied customer, but is even more disappointing a Veteran what we hold in high regard has not been satisfied.  .     

  Customer Answer

  Date: 09/02/2023

   
  Complaint: 20504788
  
  I am rejecting this response because I highly doubt that your clients are willing to allow their interest rate to go unlocked while shopping for a home. This company is full of nonsense, now ***** has stated I need to show him my **************** quote to close on the loan. 
  
  Sincerely,
  
  *******************

  Customer Answer

  Date: 09/06/2023

  This issue has NOT been resolved. ***** still hasnt fulfilled his duty pertaining to the loan. Beware of this company, do business with them at your own risk.

• Initial Complaint

  Date:05/08/2023

  Type:Billing Issues
  Status:

  ResolvedMore info

  Complaint statuses

  Resolved:

  The complainant verified the issue was resolved to their satisfaction.

  Unresolved:

  The business responded to the dispute but failed to make a good faith effort to resolve it.

  Answered:

  The business addressed the issues within the complaint, but the consumer either a) did not accept the response, OR b) did not notify BBB as to their satisfaction.

  Unanswered:

  The business failed to respond to the dispute.

  Unpursuable:

  BBB is unable to locate the business.

  Megastar Financial advised of an escrow shortage 2/2023. When I contacted them, they discovered they overpaid my county in taxes supposedly. To this date, they have not corrected the problem and continue to overcharge me monthly creating a financial hardship for me.

  

  Business Response

  Date: 05/30/2023

  MegaStar Financial Corp. has resolved the customer complaint and has been responding directly to **************** regarding the complaint resolution. The Megastar customer service department was already in the process of bringing Ms. ******* complaint to a resolution when she submitted the complaint to the BBB. Her escrow account was corrected on 03/28/23 and she has made two payments since that resolution date.

  Customer Answer

  Date: 05/30/2023

   
  Complaint: 20033954
  
  I am rejecting this response because:

  Megastar has not resolved my issue in any way. Their customer service department reached out to me to tell me AGAIN that they are waiting for a refund from my county for over paid taxes. This is the same information they have been giving me since February. Each time I speak with them, they tell me to give them 2-3 more weeks. I have made one payment in the correct amount which was my May 2023 payment, which they listed as a partial payment. My June statement has the same incorrect amount they have been fraudulently collecting from me since February.
  
  **********************************************

  

  Business Response

  Date: 06/19/2023

  Due to the sensitive nature of this complaint, MegaStar Financial Corp. has responded directly to the complainant.

  Customer Answer

  Date: 06/21/2023

   
  Complaint: 20033954
  
  I am rejecting this response because:
  I have had no further communication with MegaStar. The shortage in my escrow account was reportedly due to an overpayment to my county. They have claimed since February they were waiting for a refund from my county. This has NOT happened and they dont even bother calling every 2-3 weeks to say it will be a couple more weeks!
  **********************************************

  

  Business Response

  Date: 07/14/2023

  MegaStar Financial is working with **************** here locally in ****** and bypassing the sub-servicer.
  

  MegaStar Financial's Executive Vice President contacted *****************

  **************** articulated additional facts that MegaStar Financial was not aware of; her escrow account had been tapped for taxes six times and not the usual two times by the sub-servicer.

  MegaStar Financial's Executive Vice President has stated that **************** will be made whole by MegaStar Financial and MegaStar Financial will seek redress with the sub-servicer.

  Once this process is complete to ******************** satisfaction, MegaStar Financial will post that on the BBB website.
  

  Customer Answer

  Date: 07/25/2023

   
  Better Business Bureau:
  
  I have reviewed the response made by the business in reference to complaint ID ********, and find that this resolution is satisfactory to me.
  
  ***********************************************

• Initial Complaint

  Date:11/08/2022

  Type:Order Issues
  Status:

  AnsweredMore info

  Complaint statuses

  Resolved:

  The complainant verified the issue was resolved to their satisfaction.

  Unresolved:

  The business responded to the dispute but failed to make a good faith effort to resolve it.

  Answered:

  The business addressed the issues within the complaint, but the consumer either a) did not accept the response, OR b) did not notify BBB as to their satisfaction.

  Unanswered:

  The business failed to respond to the dispute.

  Unpursuable:

  BBB is unable to locate the business.

  My son is a successor in interest to a Megastar loan held by his deceased father. Since August, he has been sending in requested documents to take over the home loan. He has sent the same documents at least four times and each time he receives a letter asking for the documents again. I feel the company is stalling on this request since the current home loan is a low interest loan and the company makes no money from fees and services by allowing him to take over the loan. This has caused hardship to my son, and his siblings as he tries to close the estate of his father.

  

  Business Response

  Date: 11/10/2022

  ************;
  
  MegaStar Financial Corp. cannot respond to your complaint because there was not enough detail to determine which loan you are talking about.  
  
  Also, from your complaint, you are not listed on the loans note or deed of trust. Because of this MegaStar Financial cannot discuss with you any of the details of the loan.  There are privacy concerns that must be adhered to, to protect the parties to the loan. 
  
  MegaStar Financial Corp. suggests that this complaint be withdrawn and your son refile the complaint.  MegaStar Financial will need from your son the loan number in question, the original borrower name(s) and the property address.  And for privacy concerns, please have your son provide a copy of his appointment as personal representative to his fathers estate.
  
  

• Initial Complaint

  Date:09/09/2022

  Type:Product Issues
  Status:

  AnsweredMore info

  Complaint statuses

  Resolved:

  The complainant verified the issue was resolved to their satisfaction.

  Unresolved:

  The business responded to the dispute but failed to make a good faith effort to resolve it.

  Answered:

  The business addressed the issues within the complaint, but the consumer either a) did not accept the response, OR b) did not notify BBB as to their satisfaction.

  Unanswered:

  The business failed to respond to the dispute.

  Unpursuable:

  BBB is unable to locate the business.

  They work with a PMI group that is scamming everyone. I was scammed out of 3 months of PMI payments for which I am seeking $480 compensation to make up for it. I had sent the request over by email in April which is the ONLY was this group communicates. They tell you it will take 30 days to get a response from them. 30 days later I get a response from them, but the next months charge was ALREADY in process by then. Its a scam. Then I get the steps and make a payment for the appraisal. The customer service agent at ********************** forgets to put it in the correct place, for 3 weeks until I called them again they didnt even realize that they made this mistake. They finally got the payment applied to the correct place but by then ANOTHER months PMI payment was applied. Then it takes a while for the apprasier to get out to me. It was approved by July ***** I think but I was still charged in August for ANOTHER mortgage insurance payment after they already approved it. If you try and email it again they say it will take another 30 days for a response which conveniently makes it so you have to make another mortgage payment. Its a scam their setup. There needs to be a phone option for us and they need to process things more quickly. I want $480 for the additional payments I made that I shouldnt have had to make

  

  Business Response

  Date: 09/22/2022

  September 22, 2022
  
  Better Business Bureau
  12639 **************.
  Suite 200
  *****, ** *****
  
  Re: Case number: 18004421
  
  To Whom It May ****************** have received your correspondence dated September 12, 2022, pertaining to Case Number 18004421. We understand the borrowers concerns and take this matter seriously.  We have conducted a thorough review of the circumstances cited in this case. 
  
  While were are unable to provide personal financial information, we would like to share with you the specific steps we took to resolve the issue with the borrower. In the letter we provided to the borrower, we explained that:  
  
  Private Mortgage Insurance (***) was removed from the borrowers account in July 2022.

  The *** is paid in arrears which means that the current month is covered by the following month. Also, please note that the month of cancellation is required to be covered by a *** payment. 

  A partial refund was sent to the borrower on September 12, 2022 for the unearned *** premiums.
  No further refunds are available from the *** carrier.
  
  We attempted to contact the borrower on September 13, ***************************************** leave a message to return our call.
  
  The resolution was different than the borrowers desired outcome due to loan servicing guidelines/rules/statures. We consider this matter closed at this time.
  
  Should you have any questions regarding this matter, please contact me at ************.
  
  
  Sincerely,
  
  ***********************
  Executive Resolution Specialist