Consumer complaint received 2018-03-26
Company: PHH Mortgage Services Corporation
State: MD
Product: Mortgage
Sub-product: VA mortgage
Issue: Trouble during payment process

Complaint:
I previously submitted a complaint on this matter. PHH responded and the case was automatically closed by the CFPB. I was informed that I had to submit another complaint to continue this matter. 
The major facts have not changed and PHH does not seem to either understand, or care to follow the clearly written regulations. 

On XX/XX/XXXX, I informed PHH that I paid my taxes in the amount of {$3300.00} for the year XXXX. I was instructed to fax in proof of the payment, which I did on XX/XX/XXXX, but due to a backlog of such requests PHH didnt mark it as received until XX/XX/XXXX. I did make several follow-ups and was told each time it was in process. 

PHH states in their response However, the Real Estate Settlement Procedure Act ( " RESPA '' ) requires the collection XXXX of the total taxes and insurance billed. The total amount projected to be paid for taxes and insurance in XXXX is {$5100.00}, so {$420.00} is required to be collected each month according to the RESPA regulation and is unable to be altered if the bills are prepaid. 

This is not true for several reasons. First off, the projected amount to be paid in taxes and insurance in XXXX {$1800.00}, as shown on the PHH Escrow analysis the provided and that is attached. ( {$230.00} & {$140.00} for taxes in XX/XX/XXXX, {$1400.00} for insurance in XX/XX/XXXX ). 

XXXX admits in their first response We then updated our system to reflect that the next county tax bill will be due in XX/XX/XXXX. They know there are no taxes, and nothing more than {$1800.00} due until XXXX of XXXX and they freely admit that. 

The second reason their response is not true is that per RESPA page 12 : Shortages, Surpluses, and Deficiency Requirements12 CFR 1024.17 ( f ) The servicer shall conduct an annual escrow account analysis to determine whether a surplus, shortage, or deficiency exists as defined under 12 CFR 1024.17 ( b ).

Per 12 CFR 1024.17 ( f ) C. 1. ii.Charges during the life of the escrow account.

Throughout the life of an escrow account, the servicer may charge the borrower a monthly sum equal to one-twelfth ( 1/12 ) of the total annual escrow payments which the servicer reasonably anticipates paying from the account. In addition, the servicer may add an amount to maintain a cushion no greater than one-sixth ( 1/6 ) of the estimated total annual payments from the account.

PHH does not reasonably anticipate paying taxes until XX/XX/XXXX as they freely admit. 

PHHs own FAQ on how escrow accounts are calculated says that they add together what they expect to pay within 12 months, and divide that by XXXX to determine the monthly payment. That would be in accordance with RESPA and CFR guidelines, but in this case, they are including amounts they admit they know they wont be paying within 12 months. 

PHH even goes on to explain that I can submit for other off cycle analyses of my account to get the amount of overpayments refunded. This does not make sense to continue to overpay and then request refunds. Page 3 of the PHH escrow analysis clearly shows overpayment in XXXX of a total of {$3700.00}, with nothing due until XX/XX/XXXX. 

The CFR can be accessed at : https : XXXX # XXXX The RESPA guidance can be accessed at : https : //www.federalreserve.gov/boarddocs/supmanual/cch/respa.pdf and it is attached.

Company response to consumer: Closed with explanation