Consumer complaint received 2018-12-11
Company: NAVY FEDERAL CREDIT UNION
State: NC
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process

Complaint:
In XX/XX/XXXX, my wife and I applied for a VA loan with NFCU. At that time I had excellent credit and only a few hundred of credit card debt. We found a home and quickly put in an offer. After the home inspection was complete, NFCU called to say that we were not eligible for the VA loan because I was working an XXXX contract position. I have been in XXXX for XXXX years, and had worked a lucrative contract with XXXX  XXXX XXXX for the past year. 
So NFCU did a bait and switch, where they then offered us a new mortgage product which raised our monthly payment by hundreds over the VA loan. As a XXXX XXXX veteran, the gift of a VA loan was a great benefit for service, but NFCU managed to put me in a position of losing the home we had already decided was perfect for our family if we did not secure our funding at that point in the process. 
Fast forward to the Fall of XXXX, and a job loss with several months of unemployment, I fell behind on my mortgage, with my last payment made in XX/XX/XXXX. After finding a full-time job in the Spring of XXXX, I attempted to make a mortgage payment but my lender refused it. In XXXX of XXXX, I reached out to my lender in the hopes of getting approved for a loan modification. 
At this point, I had already received a notice of default and my lender had set a foreclosure auction for XX/XX/XXXX, XXXX this foreclosure auction was advertised at the very end of XXXX in a local paper, with the last notice being only days before the sale. Although the notices were scary to receive, my wife had asked if we were protected from being foreclosed on while we were being looked at for a modification, and the NFCU said we were, but that notices will keep coming anyway by electronic default. 
Given that we had submitted the paperwork for a modification in XXXX, well over the 37 days before the scheduled foreclosure sale, we were protected by Federal law that makes proceeding forward with the foreclosure process illegal. NFCU never foreclosed as planned for XX/XX/XXXX but rather postponed and rescheduled the foreclosure sale for XX/XX/XXXX. Almost two months had passed since my wife and I had initially asked for a loan modification, and a package arrived outlining a Repayment Plan that asked for {$6100.00} within two weeks, followed by a monthly payment of {$3800.00} for the next twelve months. 
My wife said that we should have been considered for a modification plan, and that per Dodd-Frank housing protection laws, there was no longer a one and done rule on being approved for a modification twice on the same loan. The " One bite of the Apple '' exclusion was no longer legal for lenders refusing a second modification, so long as at least one payment was made on the previous modification. This was out of the realm of comprehension for our loss mitigation agent - she seemed to have no idea of the protective Federal laws now in place. 
As my take home pay is {$8000.00}, the first installment was way more than 70 % of my monthly income, and the monthly payment being asked of us was well over 45 %. My wife asked if there was any other arrangement that we qualified for, and the NFCU employee said time was running out - that the foreclosure process was almost complete. My wife advised her that the process should have been halted per Federal Laws, and to this we were told that our foreclosure sale date had been set for XX/XX/XXXX! 
Not only do we have a newspaper posting affidavit that shows an advertised sale of XX/XX/XXXX, but the postponement and rescheduling were carried out while our complete modification package had been sent in. Further, there is an affidavit stating that my wife had been personally served by a sheriff regarding the foreclosure hearing, when instead only I was served. 
On the morning before XXXX, we were evicted on the spot - my XXXX  children, wife and XXXX dogs were not given notice by me, as I thought I had time to fix this matter with a redemtion period. While it is absolutely my fault for not filling my family in on the timeline, I was shocked that they would evict us with less than 24 hours to XXXX! 
My wife immediately reached out to NFCU to ask them to rescind the foreclosure, given rampant violations concerning Dual Tracking, and the fact that the actual sale was not advertised in the papers. To this she was given the run around for days, until she reached a supervisor and threatened a law suit if NFCU refused to take responsibility for Dual Tracking us into foreclosure. 
One last phone call found a supervisor acknowledging the mistake, and admitting that " several of my bosses are looking at your file right now in a closed door meeting. '' After telling my wife this, she transferred my wife to a XXXX XXXX, who would not discuss anything with her, but instead referred her to the lawyer who was assigned to our foreclosure. 
My wife called the lawyer and explained our position, and simply stated that we would be willing to not bring a law suit and instead work with NFCU on rescinding the foreclosure, due to several violations regarding Dual Tracking. This lawyer listened to my wife 's explanation of how the Dual Tracking occurred resulting in our foreclosure, and said that although he could not disclose what he would be advising NFCU to do, he would be talking to our lender over the specifics of our situation. 
When I called for a status update, I was advised that NFCU did not feel that setting a new foreclosure sale date, advertising our home and selling it at an auction just days after we received an approved Repayment Plan, fell under Dual Tracking. I then asked for an immediate review of our foreclosure documents by their legal counsel, and was told that they would not be doing so. 
At this point we retained an attorney for an initial cost of {$1500.00}, who said that he tried very hard to get them to forward documentation to prove that they did not break Federal and State laws in Dual Tracking us into foreclosure. To this there was no response, other than verbal denial of Dual Tracking,  and a ridiculous offer of {$1500.00} as a " Cash for Keys '' deal - with the understanding that we would sign our right to sue away with acceptance of the cash offer. 
NFCU 's lawyer claimed that a lender representative had asked for {$3000.00} over the phone to start the repayment plan in late XXXX, but this is not true. No such acceptable arrangement was ever put forth, and we have the loan repayment letter to prove the unreasonable and unfair demands. Upon reviewing the repayment plan letter, we called NFCU and explained that the monthly payments were dollars away from half of our take home pay, and that this was corrupt at best, and certainly not manageable for my family of six.

NFCU explained that this was our only option, and that if we did not pay the first installment by XX/XX/XXXX, they would sell our home at a foreclosure auction immediaely. My wife told the representative at NFCU that we had more time to find another loss mitigation arrangement, as the foreclosure process was legally halted during our modification review. To this the NFCU rep said there was no stopping the foreclosure once it started months back in XXXX. Unable to meet the demands of the initial repayment plan, we were researching other foreclosure assistance options for veterans outside of our lender, but within 7 days of our not moving forward with their " only option '' NFCU foreclosed on our home.

The lawyer we hired when communication broke down with NFCU charged us half of the {$1500.00} retainer for a couple emails and a couple of phone calls, and said he would proceed with a lawsuit if we could pay an additional {$5000.00} in retainer. We do not feel we should have to come out of pocket again, as the foreclosure package and loan repayment letter clearly prove Dual Tracking occurred. 
I trusted NFCU to behave in a fair and honest manner, and from how we have been treated, all I can say is run, dont walk, from a lender that caused my family tremendous pain and hardship by ignoring Federal and State laws put in place to protect all borrowers after the XXXX Housing Crash. 
I am asking the CFPB to hold our lender NFCU accountable for giving us the run around during this whole process, and for illegally Dual Tracking my family right into foreclosure.

Regards, XXXX XXXX

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