Consumer complaint received 2017-08-16
Company: Midwest Loan Services, Inc.
State: WA
Product: Money transfer, virtual currency, or money service
Sub-product: Domestic (US) money transfer
Issue: Other transaction problem

Complaint:
Dear Consumer Financial Protection Bureau, Today is XX/XX/XXXX. I  am a member of XXXX XXXX XXXX in XXXX, OR. Besides my primary banking, I have a home mortgage with them. XXXX utilizes Midwest Loan Services XXXX XXXX XXXX, XXXX, MI XXXXto service their mortgages and XXXX as a subcontractor for their online bill pay. On XX/XX/XXXX, I used my XXXX XXXX online bill pay to make an automatic mortgage payment on my XXXX XXXX mortgage of {$1800.00} from my XXXX XXXX checking account to their mortgage loan servicer, Midwest Loan Services. I was in error as the escrow portion of my payment increased and my payment was short about seven dollars and I failed to increase my automatic payment. On XX/XX/XXXX ( same day ) Midwest generated a letter to me on XXXX XXXX letterhead that stated they no longer allow partial mortgage payments and have returned ( past tense ) my funds to me. On XX/XX/XXXX, I called Midwest Loan Services as I had not had these funds ( {$1800.00} ) returned to me. I was told on XX/XX/XXXX the funds were returned to XXXX and should be reflected within 48 hours on my account ; I had never heard of XXXX but learned they actually are a company behind my credit union 's online bill pay system. Midwest claimed your regulations required to return the funds back to whomever sent them to them, in this case XXXX. I called XXXX XXXX and filed a complaint that my {$1800.00} is missing. They said they would follow up with XXXX. On XX/XX/XXXX, 'XXXX ' from XXXX called me ( XXXX ) and said they had never received anything from Midwest Loan Services . We did a conference call with 'XXXX ' of Midwest Loan Services ( XXXX ). Midwest Loan Services stated they received a check from XXXX and therefore were going to return a check that may take up to three weeks to generate. I pointed out that I made the payment on XX/XX/XXXX electronically and that same day they generated the letter ( under XXXX XXXX XXXX letterhead ) stating they had returned the funds as a partial payment, so it could not have been a mailed check. 'XXXX  ' from XXXX confirmed that the funds were sent electronically. I asked why were n't the funds returned electronically? I was told that CFPB regulations required that a hard check be returned only to the entity that sent them the money, in this case XXXX, to combat money laundering. I was told a check may take up to three weeks to be generated and received. I asked who the CFPB was and what the acronym stood for promising to follow up. There was some confusion about what CFPB stood for. As a consumer, it appears that this entire transaction is under XXXX XXXX XXXX. I did not point out that my original mortgage contract with XXXX XXXX did not state that partial payments are not authorized, in fact it states I can make early payments. I believe that Midwest Loan Services unilaterally  made changes to the contract rules. I do remember receiving an email from them about no longer accepting partial payments. Bottom line is Midwest Loan Services, as an agent for XXXX XXXX XXXX, received {$1800.00} of my funds electronically transferred to them from my XXXX XXXX XXXX checking account, has refused to credit these funds towards my account due managed by them, has not to date returned these funds and states that they may not be returned to me for up to one month time period after receiving them. Further they stood to charge late fees if another payment had not been made again within a few days of when they notified me by letter. Further they state CFPB regulations require they act in this manner. Is this true? If so, I do not believe your regulations are protecting the consumer and you should consider changing them. If not, I would like to know so I can address this with my credit union and their contract with Midwest Loan Services. Thank you!

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