Consumer complaint received 2018-05-04
Company: Freedom Mortgage Company
State: ID
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process

Complaint:
XX/XX/XXXX My auto payment for XXXX was deducted from my checking account and paid to my mortgage lender Freedom Mortgage.XX/XX/XXXX I received a call in the evening stating they had not received my payment and were calling to collect. I checked my account it had been debited and upon further discussion learned that my payment had increased to XXXX due to an escrow shortage and a letter had been sent to notify us. We had been on vacation when the letter was sent and missed it because they send a ton of mail. So while they had received my payment, it was in a holding account because it was not the full amount and had not been credited. I immediately gave them my card number to debit the additional XXXX and was informed there was also a late fee of XXXX. It was late, so I paid it but the customer service associate said he would submit a request to have it waived.

After getting off the phone, I was questioning whether or not fair lending laws allow a late fee of that amount because I work at a bank and my memory was that lending companies can't charge more than the amount that is late in fees. I looked up state law as well, Idaho Statute Section 28-42-301 ( 2 ) XXXX XXXX XXXX XXXX  ; With respect to a regulated consumer loan secured by a security interest in real property which is used or expected to be used as the residence of the debtor which is not a precomputed regulated consumer loan, the parties may contract for a delinquency charge on any installment not paid in full within fifteen ( 15 ) days after its scheduled due date in an amount not exceeding five percent ( 5 % ) of the unpaid amount of the installment, or XXXX  dollars ( {$15.00} ), whichever is greater.

The request was denied so I called customer service to discuss. I was told it was denied and there was nothing that could be done so I asked to speak to a supervisor. I was then told I wasn't allowed to speak to a supervisor per their new policy that the representative that answers the call has to resolve the issue and because it was resolved there was nothing more she can do. I asked to speak to a supervisor several more times and was denied and offered an email address to lodge my complaint. She finally transferred me to another department and I explained the situation and the law to two additional people. One of whom explained to me that the late fee amount is 4 % of the amount of the monthly payment and when you don't pay the full amount of your monthly payment none of it is credited to the account - the mortgage co holds it, and that is why they charge the late fee on the total amount of your monthly payment not just what is late. I explained that is where they are violating lending laws as I understand them and shared the ID statute that it should only be on the unpaid amount. She finally agreed to try to remove the charge but told me she didn't know how because once a charge is made there isn't a way to credit an account back but she would take care of it. Her name was XXXX XXXX. I told her I was perfectly fine with being charged a {$15.00} late fee because the amount was late but 111 % was not acceptable. When doing my taxes recently I noticed the fee had not been credited back. I am tired of fighting with the company. This was the second time I have called them out on lending practices, the previous was during our refinance the prior XXXX which they admitted and reconciled but I am concerned for people who don't know and are being taken advantage of.

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