Consumer complaint received 2021-06-21
Company: LoanCare, LLC
State: VA
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process

Complaint:
Hi I purchased a home in XXXX of XXXX for {$290000.00} At the time my PMI payment was {$230.00} per month. 

The home value decreased under the purchase price, but I was able to refinance in XXXX under the HARP program to get a lower rate on the mortgage. This refinance was done with quicken loans. 

The PMI continued on at {$230.00} per month after the refinance. 

My reading of the XXXX  provisions is that it required the the lender to at least preserve the original terms of the PMI agreement. essentially giving me the credit for all the PMI I have paid in over the prior years. PMI is an insurance contract to protect for the risk of default ... The Harp program required that original PMI contract be enact post refinancing. 

This was not done .... The original PMI agreement was not taken into account. The Loan was reset with a significantly lower XXXX  .... I was not made fully aware of the XXXX  evaluation at the time of the refinance and the Impacts that this would have on future PMI. 

What occurred under the HARP refinance program was unethical and blew up provisions of the Homeowners Protection Act, meant to safe gauge homeowners from excessive PMI. 

By drastically dropping the Original Purchase price from XXXX to XXXX, this violated sections of the Homeowners Protection Act meant to save homebuyers from excessive PMI. By starting these loans with a loan to value ration of 125 % this violated the homeowners protection act Automatic Cancellation provisions and created a situation where the the 80 % loan to original was only achieve through the collection a huge amount of excess PMI. 

I have continued to pay a very high rate of {$230.00} per month ... and am in my 165 month paying this ... with no end in site. approaching {$40000.00} in total payments. 

Allowing lenders to Reset the PMI automatic cancellation clock, and setting the XXXX at an artificially low amount, is a gross abuse to the homebuyer, and in conflict with the safeguards set up in the Homeowners Protection Act. 

All lenders holding such PMI policies for XXXX  refinanced loans, should be asked to cancel the PMI immediately. The original Home refinance in XXXX was done through XXXX XXXX, I believe this where the mistake occurred ... I Have been on the phone with their top tier of support to review the issue. They were not feeling like a mistake was made. 

I need to understand what was intended in the XXXX  program ... it mentions that the original terms of the PMI agreement were to be preserved .... I take this to mean that the lender should not have wound the XXXX clock back to 125 % they should have used the original purchase price. Otherwise the entire Harp program was a shell game to collect more PMI and make money off of unsuspecting people who found their homes XXXX in at temporary low point, that did not allow them to take advantage of the prevailing low rates. 


The loan is now in possession of Loan Care LLC .... I have described the situation to them also, but they are not willing to resolve it by adjusting the original purchase price to {$290000.00} and letting the automatic 78 % XXXX provision kick in. 


We should not have to incur the cost and headache to have the home appraised to eliminate PMI .... We should be afforded the same automatic cancellation provisions in Homeowners Protection Act. We should not have had our home re-assessed at a very low point to cause the the PMI automatic provision to extend way way beyond the original contract. The entire premise of the automatic cancellation provision of the homeowners protection act is to prevent the extending out of the PMI contract based on increased risk associated with the drop in FMV ... .. I feel like that protection has been bypassed in my case .... Given the huge financial impact this could have on the homeowner none of this was properly disclosed in the XXXX  refinance process.

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