Consumer complaint received 2023-12-08
Company: MIDFIRST BANK
State: IL
Product: Mortgage
Sub-product: VA mortgage
Issue: Struggling to pay mortgage
Sub-issue: Trying to communicate with the company to fix an issue related to modification, forbearance, short sale, deed-in-lieu, bankruptcy, or foreclosure

Complaint:
Our family was impacted by Covid resulting in income loss and our original mortgage company XXXX XXXX offered the CARES act forbearance as required by the government. Once the hardship was resolved and the forbearance ended they followed government guidelines and began the process of reviewing our financial situation for a solution to address the arrearages and were told they were likely going to recapitalize this amount into the balance of our loan. However, the loan then got transferred to XXXX XXXX and instead of completing a review for options to recapitalize or defer or modify the loan to address the forbearance payments they instead demanded full reinstatement. ( Statement attached ). This is in complete violation of CARES program guidelines as servicers are REQUIRED to work with borrowers and review financials to offer all options to address the forbearance arrearages. Servicers are FORBIDDEN FROM DEMANDING FULL REINSTATEMENT on VA loan through CARES. We were led to believe that was the only possible option. Because of these actions by XXXX XXXX we were denied access to programs that they were required to review our loan for. We did not have the ability to reinstate the loan and instead we fell further behind and the loan was then transferred to Midland and we were immediately put into foreclosure. No one at XXXX XXXX or Midland explained to us that they were REQUIRED to provide access to programs to address the arrearages ; instead we were told the only option was full reinstatement. 

We could not pay the full past due balance and as we went into foreclosure a representative from VA told us we had options and rights with VA loan so we applied for assistance through Midland as well as the Illinois HAF. Due to upcoming foreclosure we filed bankruptcy. Our Attorney said submit the regular monthly payment of {$2800.00} for XX/XX/XXXX so we submitted this amount that was accepted. Unbeknownst to me, we had been approved for a trial loan modification with a monthly payment of {$3300.00}. We did not receive any type of correspondence in the mail or any approval notification on the online dashboard. When I went back online the following day to verify that my payment was accepted I saw a screen that showed our old payment that was due from XX/XX/XXXX for {$2600.00} and below that in small letters it listed modification plan with payment of {$3300.00} with start date XXXX. XXXX. ( attached ) I immediately attempted pay the remainder of payment since I had paid less than the trial due to the lack of communication but the system would not accept. When I called in to discuss I asked if I could wire the difference I was told that since I did not make the full payment all at once I had been kicked out of the trial modification. This was an unbelievable turn of events and unacceptable. This problem should have been resolved in early XXXX if Midland and XXXX XXXX followed guidelines. When they finally agree to provide the help I should have received 18 months ago they dont even NOTIFY ME! 

I applied again over the phone and recently was approved for a Covid disaster modification and the new payment is {$4600.00} a month which I cant afford. I was eligible for a Covid disaster modification in XX/XX/XXXX when my CARES forbearance ended. Now my arrearages are at $ XXXX because of malfeasance, unethical business practices and incompetence. 

We then found out Illinois HAF approved us for {$60000.00}. However Midland refused to provide any plan or program to address the additional past due balance above the $ XXXX paid for by HAF. The VA DOES allow for the servicer to modify the portion of delinquent arrearages that are not covered by HAFin this case Midland was legally required to provide information to HAF related to a modification offer based ONLY on the arrearages not covered by HAF. At this time that would be a modification with terms based on arrearages of $ XXXX not $ XXXX.

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