Consumer complaint received 2021-04-21
Company: PENTAGON FEDERAL CREDIT UNION
State: MD
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Closing on a mortgage

Complaint:
In XX/XX/XXXX I applied for a refinance loan from Pen-Fed credit union. My mortgage was already with Pen-Fed so refinancing with them for a lower interest rate was what I thought would be a prudent decision. When I applied for the refinance I was offered the opportunity to have my existing escrow balance of {$3200.00} applied to the new loan balance. At that time, in XX/XX/XXXX, I informed the loan officer that I did not want my escrow funds applied to the new loan amount. Over the subsequent months as my loan was processed I was assigned ( 3 ) different loan processors and unfortunately encountered a cascade of miss-steps, document errors and a 'breach ' of my personal information by the loan processor. Gratefully, I was informed of this 'breach ' by an individual unknown to me who had received my information via an e. mail sent to him by my loan processor. The 'breach ' was not identified by the Pen Fed management team and when I informed the Pen-Fed team leader, Mr. XXXX of the breach, he minimized the 'breach ', negated that it was a 'breach ' and essentially refused to take any responsibility for the 'breach '. 
At the time of closing, 8 months later, on XXXX XX/XX/XXXX, a notary arrived to my home and due to COVID restrictions gave me the documents through my doorway and requested I sign them while the notary waited in my driveway. So essentially, the documents were not explained to me as what typically would occur during a closing. Several days later I sent the Pen-Fed team an inquiry as to when I can expect my escrow check. Much to my surprise I was informed that my escrow funds were applied to the loan balance. I made several attempts to inform the Director of mortgage services, Mr. XXXX that I had not approved this action, that I was not informed my escrow funds would be applied to the new mortgage loan and that I had specifically informed the loan officer in XX/XX/XXXX that I expected to receive my escrow funds. MrXXXX XXXX informed me the decision to roll over my escrow funds to the new loan balance was internally done by Pen-Fed which was a new practice they instituted in XXXX to benefit the borrower by lowering the loan balance. 
My escrow loan balance of {$3400.00} was withheld from me without my knowledge and despite the fact that I had expressed that I wanted the funds sent to me. Pen-Fed blamed me that I was remiss in exercising my right of recession ( cancel/adjustment period ) and that there was nothing they can do to return the escrow funds to me as the loan had already been funded. I unsuccessfully informed Mr. XXXX that if I had been informed the escrow funds would have been applied to the new loan balance, I would have cancelled the closing. 
As a Pen-Fed client I was not afforded the right to have access to my escrow funds. This decision was internally rendered by the Pen-Fed team without notifying me and/or giving me the option to decide where my escrow funds should be applied. Their actions were dishonest and misleading by stating their decision was beneficial to me as it lowered the loan amount. Pen-Fed has no policy in place that authorizes them to take control of the client 's escrow funds without their permission, knowledge and/or explicit instructions to not do it. I have now been told that all options have been exhausted to reconcile this issue as the loan has been funded and I should essentially be grateful that they took this action to lower my loan amount. 
My rights as a Pen-Fed client have been denied and ignored and I have been cheated out of having control of my escrow funds. It is my right to decide how my escrow funds should be disbursed and I intended to have access to my escrow funds and it was my right to decide if my escrow funds should go towards the loan balance. 
In conclusion my concerns are twofold : 1. Pen-Fed violated my rights as a client by taking my escrow funds and applying it to my loan balance without my knowledge, permission and my outright expression that I did not want it done. I, like everyone else, who goes through a re-finance looks forward to receiving their escrow funds check and the absence of these funds have placed me in an economic hardship. 
2. Pen-Fed breached my personal information to a non Pen-Fed bank employee and no action has been taken by Pen-Fed to reduce the risk of my personal information being published and /or used by hackers. 
I am requesting my escrow funds be returned to me. I should be afforded the sole opportunity to decide how to spend my escrow funds and it should be my decision to apply those funds to my loan amount, it is not Pen-Fed 's decision. Secondly, I am asking Pen-Fed to take decisive and swift action to reconcile the 'breach ' of my personal information, which they have ultimately and finally acknowledged that a 'breach ' had occurred. 

Thank-you for your kind attention in allowing me to express my concerns. 
XXXX 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