Consumer complaint received 2020-08-18
Company: Specialized Loan Servicing Holdings LLC
State: MA
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process

Complaint:
On XX/XX/2020, CMC Funding took over my loan. This loan is being serviced by Specialized Loan Servicing LLC. I started making payments bi-weekly paying half of the mortgage the first payment {$1400.00} and the other half of the mortgage with the second payment {$1400.00}. The total mortgage payment is {$2800.00}. My bill is due on the first of the month and there is a 16 day grace period before any penalties are charged. 
The reason I made the payments this way is because I get paid bi-weekly and I wanted to make even payments throughout the year. Also, part of the reason is the specific wording on my bill allows for me to make payments this way. The wording reads exactly like this, " Any partial payments that you make are not applied to your mortgage, but instead are held in a suspense account. If you pay the balance of a partial payment, the funds will then be applied to your mortgage. '' After four of these half payments XXXX payments made on XX/XX/2020, XX/XX/2020, XX/XX/2020, XX/XX/2020 ), I received a notice dated XX/XX/2020 for late payment stating my account was past due more than 15 days. Even though I had already made two months worth of payments and the account should be current. I called CMC Funding after receiving that notice and they said that they would fix the transaction and move the money out of the suspense account and apply it towards the mortgage payment.

I continued to make my payments every two weeks ( payments made on XX/XX/2020, XX/XX/2020, XX/XX/2020, XX/XX/2020, XX/XX/2020, XX/XX/2020 ), and I continued to receive late payment notices. I called them each month and each month they assured me that they would apply my payments to my mortgage. This process of them sending late payment notices has continued on for each month. Each month I have called them and they assure to me that they will fix the problem by applying the funds correctly. I have all the records indicating that I have never once been late on fulfilling a mortgage payment. 
My current bill dated XX/XX/2020 states I owe them {$4400.00} which includes penalties. When in fact I have never been late on my payments and I do not currently owe them anything. I called them in early XX/XX/2020 and asked them why they keep sending me incorrect bills and charging me penalties when my account was current. They said that they accidentally applied one of my payments back in XXXX to principal instead of applying it to the mortgage. I asked them why they would do that when the bill states that the payment is to be held in a suspense account until the payment is fulfilled. They didn't give me a reason, they just said, " we didn't know what to do with your payment so we just applied it to principal. '' So I said, " how come every month when I call you state you will fix my account to show it being current, but you never do? '' They replied with, " well your always one payment short because we applied one of them to principal. '' I replied with, " I have called you every single month and told you that I was never late on a payment, why am i just finding out about your mistake now? and please move that payment to the mortgage where its supposed to be. '' They told me they can't move the payment from principal and that I still owe them more money. Their explanation was that too much time has gone by. Even though every single month I call them and they assure me they will fix the transactions on my account, they never did. Now they won't fix their error and are demanding that I owe them more money. 
I don't understand how I can make every single payment on time, they misapply one of my payments, don't tell me they screwed up until about 4-5 months later and now its my problem and I owe them more money because they screwed up. 
I just want them to fix their mistake and show my account as current with no penalties as it should be.

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