Consumer complaint received 2021-10-28
Company: U.S. BANCORP
State: GA
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Struggling to pay mortgage

Complaint:
XX/XX/XXXX RE : Loan Modification Dear Sir or Madam, This letter is to inquire about a Subordinate Note that was haphazardly included in my XXXX Loan Modification with US Bank. In XXXX, after falling behind on payments I would try to catch them up, but as the cycle continued, I modified my mortgage in XX/XX/XXXX because of hardship. My payments were reduced from approximately {$1400.00} to around {$1000.00} which was more affordable. There was no out of pocket costs for the modification, and my term was extended 30 years. I thought the difference in my payment was added to the loan modification which would be captured in the extended term. 

In XX/XX/XXXX, I decided to apply to Refinance my mortgage to take advantage of lower rates and reduce my term. However, upon completion of a title search I was informed by US Bank that I had a Subordinate lien. I didnt know what that was or that it existed. US Bank did some digging and sent me a recorded Subordination for {$50000.00} with The US Department of HUD which expires the same time as my loan modification in XXXX. I was dumbfounded by the idea, because while I was facing hardship, I wouldnt and couldnt agree to a 2nd mortgage which would have to be simultaneously paid. If I couldnt afford my initial mortgage, how would I afford two mortgages? I dont understand where the {$50000.00} amount came from or why it was created in a 2nd lien XXXX US Bank has indicated that, they took what was owed and put it into a separate mortgage. This seems incorrect, because my missed payments didnt sum nearly that high, and whatever amount I defaulted on shouldve been added to the modification like whats traditionally done. 

While US Bank noted that Im currently responsible for payments on both mortgages/liens, Ive never received a billing statement from HUD, and the 2nd lien of {$50000.00} does not show up on my Credit Reports. How am I responsible for something that I dont know exists? US Bank has indicated that several customers were confused about these types of loans in the past which is problematic. US Bank indicated that to complete my refinance I would have to either add the {$50000.00} to the loan amount or subordinate it again. I dont know why a subordinate note was done originally, so I dont want it done again. 

It appears my loan modification was misleading. If I hadnt applied for the refinance, I wouldve never been made aware of the subordinate lien, never paid on it, and later would lose my home to a lien discrepancy. 

Why was the subordinate note was added to the loan modification and where did that amount come from?

If its truly a mortgage that Im supposed to be responsible for, why doesnt it appear on my credit reports? 
Is it forgivable if the primary mortgage is paid completely? 
Can the subordinate note be forgivable? 

Ive attached the documents associated with the modification and subordinate note. 

Your attention to this matter is greatly appreciated. 

Best,

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation