Consumer complaint received 2022-10-30
Company: Chrysalis Holdings LLC
State: WI
Product: Mortgage
Sub-product: VA mortgage
Issue: Trouble during payment process

Complaint:
I was unable to resolve a dispute with New Day USA who sold me a refinance product in XXXX. After working with New Day since XX/XX/XXXX their final decision this month was I was responsible for the tax escrow shortfall, caused by them. Since I relied on their salesperson 's representations of a lower mortgage rate and monthly XXXX payment, the fact my taxes have not gone up but rather have gone down during the service period, I feel this is an old bait and switch. When I'm told the salesperson wasn't expected to know about tax implications or how the company services the account is, to me, telling about this company. Simply put, they made the mistakes servicing their end but I suffer the consequences of their mistake. Yes, the contract says I'm responsible for the taxes but New Day 's service mistakes, not mine, caused the liability. 

I enclose my summary below up to XX/XX/XXXX. I have substantial documentation also if required. However, if there is nothing that can be done, I'm hopeful my experience with New Day will at least help others to stay away from this company. Thanks. 

New Day Dispute Summary ( XX/XX/XXXX ) In XXXX I contacted New Day USA to take advantage of the advertised refinancing 2.75 % interest rate I saw advertised. At that time I had already refinanced my home with New Day.

I spoke with a New Day representative and we came to an agreement and I signed documents electronically to finalize the agreement. 
The New Day quoted me our new PITI payment of {$960.00}. In return New Day received about {$8000.00} for their fee. The interest rate and payment amount is what convinced me to proceed with the agreement. 
In XXXX, XXXX I received a letter from New Day for Your annual escrow statement. It stated : Because your escrow account is projected to have more money than needed, there is a surplus of {$2600.00}. A check for {$2600.00} will automatically be mailed under separate cover within twenty business days. I did receive a check in that amount and deposited in my personal account. There was nothing in the letter on what to do with monies so, since it said it was a refund, I had no reason not to deposit the check. 
I received another notice from New Day in XXXX, XXXX for a New Day Annual Escrow Account Disclosure Statement. That document indicated my escrow account now had a {$5200.00} shortage and I was responsible to make up the shortage. It went on to say effective XX/XX/XXXX my new PITI payment will be {$1500.00} for the next 12 months to make up the shortagea 38 % increase in my payment. 
I called New Day on XX/XX/XXXX at about XXXX XXXX for an explanation on how this shortage occurred. My first contact was with a representative named XXXX. He was very nice and tried to help me. He had to go back and do some research. While on the phone he was looking at tax payments and was somewhat confused on what tax payments were paid for what year. But finally, he said it looked like a XXXX tax year payment was made to New Day on XX/XX/XXXX for {$3500.00}. This was a change from previous practice when they paid two installments for the taxable year. 
At that time, I still did not understand how I was liable for the escrow shortage. XXXX said hed look into it more and get back to me. 
On XX/XX/XXXX XXXX left me a message on my phone and said he didnt have an update yet but would get back to me. On XX/XX/XXXX I spoke with XXXX again. He said part of the shortage was due to me receiving the {$2600.00} refund in XX/XX/XXXX. Apparently, XXXX XXXX, which I found out later is, or was, part of New Day USA, was managing the escrow. I went back to see how this could amount could grown into more than {$5000.00} in a shortage liability to me. 
On XX/XX/XXXX I called and spoke to XXXX again. I said I still could not figure out how the refunded amount I received turned into the amount they claimed I owed. XXXX told me New Day had dropped XXXX for escrow irregularities. He went on to say the refund caused the shortfall. I told XXXX I needed to speak to someone to contest the amount owed. I said the math didnt work for me ; I had been promised a certain amount for a PITI payment and was induced to go with the refinance based upon that amount. I felt it was a bait and switch sales pitch. I made it clear to XXXX I would not make the new payment amount until I was satisfied New Day was going to make this right. I asked him, and he provided, a number so I could escalate my concern. 
On XX/XX/XXXX at about XXXXXXXX XXXX. I spoke to XXXX with the New Day Customer Advocacy team. Let her know my concern and my confusion on how the refund I received caused the shortage. She said she was going to look into the matter and get back to me. 
I again spoke with XXXX on XX/XX/XXXX at about XXXXXXXX XXXX. She said New Day was going to delay the new payment amount until XX/XX/XXXX so they had time to look into the matter. She told me I would receive an email in a couple of days. I did tell her again I did not understand how the escrow refund caused this shortage ; asked her why XXXX didnt structure the escrow right ; and, how I felt I was sold one product but received a different product. XXXX said she was going to have a new escrow analysis done to verify the shortage calculation. 
At this point the communications became very involved and very confusing. 
I spoke to XXXX on XX/XX/XXXX. She said they had been in contact with the local tax authorities and determined the subserver ( I assume XXXX ) paid {$1900.00} on the tax but it was applied to the wrong parcel number. She said I would receive a refund in that amount in 60-90 days. I asked how that would impact the shortage and she said that would be part of the escrow analysis. In a later communication XXXX said the refund would not be issued as, when they checked with the tax authority, the payment was appropriately applied to an alternative parcel number assigned to my property. 
At this time, I first became aware New Day made a lump sum payment was made for my XXXX property tax. I didnt realize at the time that when the lump sum payment was made, when coupled with the {$2600.00} refund, caused the escrow shortage. Until that time all my tax payments were made in two separate payments. I dont know when I talked about that with XXXX XXXX If it was this conversation or another. But I was told the full payment was required. When I checked with our local tax department, I was told nothing had changed. The payment can be made in one lump sum or in two installments. We also talked about how my mortgage payment would change for increases in my tax assessment and insurance. I told XXXX the tax for XXXX was lower than XXXX ( {$220.00} less in fact ). 
I sent some additional questions to XXXX by email. 
I called XXXX again on XX/XX/XXXX at about XXXXXXXX XXXX. She said she was getting to my questions from the email I had sent the week before. I asked for the escrow analysis and she started talking about the process. I also asked for any escrow analyses since the loan inception. Finally, I asked her to get back to me and answer the questions I sent to her in the email. 
On XX/XX/XXXX I left a message for XXXX at about XXXXXXXX XXXX. I wanted to know the shortage payment schedule ; which parcel number the {$1900.00} was applied to and why that happened ; if my XXXX taxes had been paid ; and, again, why didnt all this come into consideration when the New Day salesperson was selling me a certain payment to refinance? 
On XX/XX/XXXX I called XXXX at XXXXXXXX XXXX. XXXX told me she had the escrow history and would send an email today with that and answer the other questions. I told her I would review and call her back. 
I called XXXX on XX/XX/XXXX to find out about resolving this issue. I had received the escrow history and had reviewed the documents. We talked about many things but to summarize : 1. Instead of paying off the shortage in a year New Day could extend the payment to 24 months or 36 months to reduce the payment. I opted for the 36-month for about {$1200.00} for the XXXX payment as I did not agree I owed any extra but I did not want to default on the payment. 
XXXX. I told XXXX the refund I had received in XXXX had no conditions on it. I treated as a refund so why should I have assumed I needed to hold on to it. It was New Days mistake not mine. She agreed and said she would take that issue back to the legal and leadership research team since the letter didnt give me any direction. 
XXXX. We then talked about the {$3500.00} lump sum payment for my XXXX taxes. I said the lump sum payment added to the shortage. She again agreed that the way the payment was made compounded the issue. She said each service pays different ways but did agree the wasy it was paid contributed to the problem. 
XXXX. I then brought up, again, why their salesperson didnt know about the escrow implications when he was making his sales pitch. As my taxes have been pretty static and, in fact, went down. I again said that I felt I had been misled as what was sold is now not what I received and any mistakes made were not of my doing. XXXX said she could not speak to the initial loan officer not knowing about the escrow which I found disturbing. 
XXXX. I told XXXX that I would pay what New Day can prove is an amount owed due to mistakes made by me but nothing I have done or havent done has caused this problem. XXXX said she would get with leadership to let them know my position. 
XXXX. I then received an email from XXXX ( I have the email history at the inception of this dispute ) which said leadership had declined my settlement offer and reaffirmed my obligation to bring the escrow account current. The email repeated what has been New Days position all along. 
On XXXX I spoke with XXXX again. I talked with her about the payment plan and whether we could take over paying the escrow and insurance ourselves. I confirmed I would make the payment for the 36-month plan but did not agree I owed anything other than the PITI payment agreed to at refinancing. I also told XXXX I was not satisfied with New Days position and wanted to speak to someone above her. 
XXXX was quite resistant to the request. She said there was no one higher to talk to and she was at the top. I found this ridiculous and told her so. After some more discussion XXXX relented and contacted someone while I was on the phone and we set up a call with her manager for XX/XX/XXXX at XXXX XXXX 
On XX/XX/XXXX at XXXX XXXX. XXXX XXXX did call me. Apparently, she is XXXX manager. I told her I assumed she was filled in on the issues and she said she was. I stated that the shortage was caused by New Days mistakes not mine. I said they needed to fix their mistake. Not me. She said she understood. She then brought up analyzing the escrow again based on using a split, rather than a lump sum, payment which may reduce the shortage amount. I said she could go ahead but I will not make any payment adjustments until they can show me any fault on my part. She agreed the refund and the lump sum payment caused the issue but the tax people said I still owe it. 
XXXX said she is going to go back to the team for reconsideration and will get back to me on Monday, XX/XX/XXXX.

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation