Consumer complaint received 2016-09-20
Company: Ditech Financial LLC
State: MD
Product: Mortgage
Sub-product: Other mortgage
Issue: Settlement process and costs

Complaint:
My wife and I have been upside down on our property since purchasing the home at height of the housing bubble XX/XX/XXXX. At that time we were in an XXXX interest only loan to XXXX with a balance of {$560000.00}. In an effort to save our property, we entered into a Chapter XXXX bankruptcy XX/XX/XXXX. The bankruptcy stripped away the second lien, reducing the mortgage to a {$440000.00} interest only loan and then the loan transferred to B of A. At the time of the transfer, the XXXX of the property was in the high XXXX to low XXXX range. We successfully completed the Chapter XXXX in XX/XX/XXXX, but although we were able to make our trustee payments we fell severely behind in or mortgage payments.The loan ( which transferred from XXXX XXXX XXXX to XXXX XXXX XXXX to Ditech ) is 1412 days delinquent as of XX/XX/XXXX. The loan is an interest only loan at 7 percent and we also owe unpaid escrow amounts. The current statement from Ditech ( attached ) has rolled the principle balance of {$440000.00}, a corporate advance balance or escrow of XXXX ( this calculation is not explained in any of the loan documentation ), and an Unapplied funds balance of {$1200.00} ( is n't this money I 've paid that has n't been applied ). The balloon for the original 30-year interest only loan also begins XX/XX/XXXX - so the new full monthly payment ( including escrow ) totals {$4000.00} if I ca n't refinance or modify the loan. Fortunately, Ditech put me in a trial modification that said I had been approved for a trial period under Tier 2 of the Home Affordable Modification program. The terms of the modification based on our gross income of {$17000.00} ( see attached ) were for a loan amount of {$390000.00} at 3.125 interest rate for a 40-year term. Additionally, they would set aside {$170000.00} as an interest free principle forbearance to be paid as a balloon at the end of the 40-year term. The payments of {$2000.00}, which included an estimated escrow amount, began XX/XX/XXXX through XX/XX/XXXX. 
On XX/XX/XXXX Ditech posted that I had been " Approved '' for a HAMP modification ( see attached ). Although Ditech has not mailed the permanent modification terms to me as of XXXX XXXX, XXXX, they did post them online to my account. Here is the crux of my complaint : I believe Ditech is violating the HAMP guidelines under Tier 2, because they are offering the 40-year amortization payment for {$2000.00}, but on a 20-year term with a balloon at the end that accrues interest on the shortage each month. I believe the HAMP Tier 2 guidelines require a minimum 30-year term with this kind of arrangement. As offered, I will owe an estimated balloon payment of {$260000.00}. Coupled with a principle forbearance of {$180000.00} ( yes it inexplicably increased by {$14000.00} ), I will owe {$440000.00} at the end of the 20-year term. Any payment amount over the {$2000.00} will be applied to the principle forbearance and not the interest bearing balloon. Additionally, the terms authorize an increase annual increases to the monthly payment and escrow after the first year. Here 's an excerpt : " The above terms in this Section XXXX. shall supersede any provisions to the contrary in the Account Documents, including but not limited to, provisions for an adjustable or step interest rate. '' This language appears to allow them to make " unlimited '' annual increases to my " fixed '' interest rate. Also, there is no language capping these increases, which could conceivably continue for the entire 20-year term. 
When I called the listed " account representative '' with questions about these terms, I was referred to the " investor negotiator '' who to date has not returned any of my messages. 
Ditech has not provide any documentation that itemizes their fees or estimates. They also have not included any kind of proposed amortization schedule detailing principle and interest paid under these terms.

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