Consumer complaint received 2021-10-18
Company: PENTAGON FEDERAL CREDIT UNION
State: VA
Product: Mortgage
Sub-product: Home equity loan or line of credit (HELOC)
Issue: Trouble during payment process

Complaint:
I have a home equity loan ( HEL ) and a home equity line of credit ( HELOC ) at Penfed Credit Union. 

Both loans have been converted to their new servicing system. Both conversions had significant errors and resulted in higher interest paid than I would have incurred pre-conversion. 

I spent many hours on the phone with their mortgage servicing dept. Today ( XXXX XXXX ) was my most recent call and I am seeing the same issues with the latest conversion after the hours of specific problems being reported, it is clear that the information is reaching the appropriate people, or they don't care. I feel that it is time for a regulatory agency to review their practice and processes. 

Background : My HEL was converted in XXXX. of XXXX It was a huge failure and it took hours to get my payments corrected. This month ( XXXX XXXX ) they converted my HELOC. I have the EXACT same issues. Here is the summary of the conversion errors 1. I was NEVER notified of the change of system for either conversion.

2. The monthly payment that I had setup in the old system for both loans were not converted. Penfed edited my automated payment and changed the " no end date '' to the date of the conversion. I received a letter in XXXX that said a change had been to my monthly XXXX mortgage draft and if I had not made it - call them. I did! I received NO notification on the HELOC conversion. 
3. The conversion process on the HEL resulted in {$700.00} in interest charged, that would not have been incurred with my autopayment setup under the old system. After spending hours discussing the impact of the conversion of my loan and the deletion of my automated payment, they corrected the missed payments ( see # 5 below ) and my equity payments were updated to reflect what I would have paid under the old system. 

Issues with the new system 4. The new HEL system will not allow an automated payment that includes an extra equity amount. You have to manually enter a payment that has extra equity and it won't allow me to setup more than 3 months of manual payments that include extra equity ( literally ignores the extra equity amount entered and setups a regular payment ).

5. The new HEL system will NOT autopay, if you are ahead on payments ( I have included an extra amount for years, so I had no payment due ). On the HEL conversion, they setup my account to autopay. However, I was ahead on payments, several payments were " skipped ''. Because I had not known about the conversion and things had been rolling along fine for years, I assumed ( my error ) my payments were being made.

6. For the HELOC conversion that took place this month, I was not setup for autopay in the new system at all. I would have completely missed this months payment ( and incurred extra interest ) if I weren't checking my balances weekly now and saw that they had converted the system.

7. The new system does not provide and automated way to make an additional equity payment. This was a capability in the old system. If you want to pay extra, you have to login each month and manually include the extra payment.. That is a significant loss in functionality. e.g. I had setup an monthly {$800.00} payment on my HELOC. My payment due amounts vary monthly and my next payment due is {$380.00}. I will not have to login everymonth - after the payment amount is posted and before the payment is due, to calculate the difference between my desired payment amount and the payment due amount and add a manual transaction to pay the extra equity. It appears that they are making it as difficult as possible to pay extra equity. 
8. The new system does not support uploading data to XXXX. The old system did. This was a significant loss of functionality.

9. My loan history ( pre-conversion ) is not visible in the new system. That was NOT converted. With the inability to upload info into quicken, I now have to manually enter each payment amount ( and manually check the amount applied to principle and interest ) to ensure my balance is being correctly updated. My lack of trust in the new system mandates that effort. 

I am including2 attachments. The first contains 3 documents that relate to the HEL conversion. The second contains screen shots that show my automated payment info being updated by PENFED and the skipped payment that was scheduled for XX/XX/XXXX Documents list :. 
1. My last HEL statement under the old system dated XX/XX/XXXX. This statement shows that I had no payment due until XXXX. As a result of being ahead on payments, the new system skipped my XXXX payment. 
2. The letter I received in XXXX letting me know that my autodraft had been changed and if I hadn't done it - call them. Apparently the conversion folks did not even inform PENFED that they were changing my information?

3. My first HEL statement in the new system dated XX/XX/XXXX. Showing my XXXX payment amount was being completely applied to interest as no payment was made in XXXX. see # 5 above. PENFED has corrected this error, but it required escalating my issue to a manager, after repeated promises by customer service to submit the problem and return my call.

Finally - from my conversations with customer support I am one of many who have been impacted by the conversion.

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