Consumer complaint received 2023-05-20
Company: LoanCare, LLC
State: DE
Product: Mortgage
Sub-product: VA mortgage
Issue: Struggling to pay mortgage

Complaint:
Dear Sir/Madam, I hope this letter finds you in good health. My name is XXXX XXXX XXXX, and I am writing to you today regarding a matter of grave concern. It pertains to an unexpected and, in my view, unfair and unjustifiable increase in the interest rate on my mortgage, administered by my mortgage servicer, Loancare LLC account number XXXX. 

In light of the economic circumstances caused by the COVID-19 pandemic, I was fortunate enough to benefit from the provisions of the Coronavirus Aid, Relief, and Economic Security ( CARES ) Act, which allowed me to enter into a forbearance agreement on my mortgage payments. The forbearance period, which lasted for 26 months, was a great help during the financial strain caused by the pandemic. 

However, after coming off forbearance, I received a modification notice from my current mortgage servicer, [ loancare ], stating that my mortgage interest rate had been raised from 3 % to a staggering 7 %. The modification letter offered no clear justification for this steep increase, nor was there any communication indicating such a change during or before my forbearance period. I proceeded to call loancare the current servicing company to complain about this increase. The initial representative asked me to reach out to the VA because they canceled the provision that allowed for the balance of what was owed to be put at the back of the loan ( partial claim ). However, I explained that I got off forbearance before the cares act ended in XXXX last year and before the VA stopped offering partial claims. I explained that the previous servicer ( XXXX  ) was actually working with me on the partial claim modification before my loan was sold to them. Loancare insisted I pay the 7 percent or sell my home.

This abrupt increase in the interest rate significantly affects my ability to maintain my financial stability and meet the repayment schedule. I am especially concerned because, as per my understanding of the CARES Act and subsequent regulatory guidelines issued by the CFPB, my mortgage servicer should not make such drastic changes without adequate notice and reasoning. I also understand that any increase in interest rates should be in line with my original mortgage contract or stated in the forbearance documents, which in my case does not sanction such a drastic hike. 

I kindly request the intervention of the CFPB in this matter, given the potential violation of the regulatory framework governing mortgage forbearance under the CARES Act. I would like to understand the reasons behind this increase and whether it complies with the provisions of the CARES Act and relevant mortgage laws. 
Enclosed with this letter, you will find a copy of the notification I received from Loancare, outlining the increased interest rate, along with a copy of my original mortgage agreement. 

I appreciate your immediate attention to this issue. It is my hope that, with your assistance, I can address this with my mortgage servicer and arrive at a fair and equitable solution. 
Thank you for your time and consideration.

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