Consumer complaint received 2018-03-16
Company: CARRINGTON MORTGAGE SERVICES, LLC
State: CO
Product: Mortgage
Sub-product: VA mortgage
Issue: Trouble during payment process

Complaint:
I purchased an investment home in XXXX from the VA under their VA Vendee Loan program. The {$130000.00} VA mortgage was processed and held by XXXX  XXXX XXXX from XXXX until summer XXXX. I routinely overpay each month to accelerate my principal payback and reduce interest costs. During this time I had no problems in dealing with XXXX, prepaying principal, or correctly crediting my payments and pricipal overpayment to Interest and Principal balances. 
In XXXX XXXX transferred my mortgage to Carrington Mortgage Services LLC. Since that transfer, Carrington has repeatedly and incorrectly charged my monthly overpayments as future loan coupon payments, meaning they are not reducing my principal owed when I overpay, and charge/collect the future interest payment on the incorrect loan balance. I regularly call Carrington to reverse the future coupon payments, and reapply overpayment to principal owed. This is a nuisance that I've never had to tolerate with any other mortgage holder, but it seemed to address the problem. 
However, during my monthly complaint call in early XXXX, Carrington 's customer service rep claimed he can't reverse interest collected in because 'the XXXX books are closed ', with the result that any XXXX excess principal payments I made in XXXX - that they incorrectly reallocated to future XXXX interest payments - are irreversible and non refundable. I do not see any such clause in my XXXX mortgage documents, and I have never had a mortgage servicer fail to correctly and accurately allocated principal overpayments to my loan balance, and recompute interest per the new balance. 
One rep asked that I no longer include principal overpayment within the same mortgage payment check, to ensure it is credited separately as principal. I complied the following month, but the second check was also applied to future interest, principal, and escrow. After one of my calls when the rep agreed to reverse my {$8000.00} overpayment to ensure it was credited to principal balance, the next monthly statement shows the correction was also reversed back to future coupon payments. 
I am not a financial scholar, but I believe the term 'fraudulent ' accurately describes this firm 's routine policy of failing to correctly allocate principal payments and recompute interest owed, and failing to correct interest collections due to 'closing the books '. In my understanding, any loan is active as long as there is a balance, and erroneous computations are always subject to correction. 
After many months of this recurring issue, I recently decided to pay this loan in full to conclude my dealings with this firm. The payoff amount provided by Carrington this week failed to credit my principal overpayments, overstating my amount owed - their figure does not credit unearned future interest payments that were supposed to have reduced principal in the month paid. I can not get a straight answer or correct loan balance from anyone available by phone at this firm, and from a quick search online, my experience is consistent with Carrington 's unearned interest collection practices with other clients.

Company response to consumer: Closed with explanation