Consumer complaint received 2022-08-08
Product: Mortgage — Conventional home mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage — 
Company: Mr. Cooper Group Inc. (NY)

I am in XXXX  XXXX Bankruptcy and under FHA guidelines I am permitted to refinance my loan. I have made 38 pre-petition payments and 38 post petition payments during a Covid pandemic. I had applied for a refinance in XX/XX/XXXX and have been waiting to close since XXXX, XXXX when the Court approved our request to refinance in XXXX, XXXX. I have been delayed by the previous mortgage loan servicer who took approximately 2 months to provide a pay-off letter which I questioned mainly because it did not reflect my post petition payment history accurately and refused to clarify the charges. By not providing an accurate post petition payment history the loan been and is preventing finalization to close. Though FHA grants me the opportunity to refinance the 2 mortgage servicers refuse to provide this information needed for approval. Mr. Cooper cites contractual application of the post petition payments even though those contractural payments stopped in XXXX and resulted in a Bankruptcy. How we still still contractually when our mortgage contract does not indicate Bankruptcy and the XXXX XXXX filing changes the contactual payment by splitting them to pre-petition payments & post petition payments. The final item required to conform with FHA guidelines is to provide proof of a 12 month history of timely post petition payments which I have made. The previous servicer XXXX XXXX XXXX kept promising that it would be provided and then sold the loan in XXXX before providing that history. The new loan servicer Mr. Cooper has now informed me that they can not provided that history. The reason is because of their accounting practice even though it differs from the previous loan servicer. Example is item # 1 indicated on the attached two mortgage servicers mortgage statements. The application of the current post petition mortgage payment differs from both servicers. One posts ( XXXX ) the current post petition payments that matches the contractural P & I for the date due of that post petition payment. The other ( Mr. Cooper ) provides the current post petition date due only but then applies the perceived contractural P & I payment from the pre-petition history. On the attached amortization schooled indicates the 2 different P & I where applied. They site contractural obligation even though they separate the post petition history by providing as in example # 2 noted on both statements the pre-petition balance that do not match without providing any detail as to how those payments were applied contractually. This contractural obligation that Mr. Cooper sites and XXXX applied has reeked havoc on my escrow obligations which has caused numerous changes to the monthly post petition payments and has resulted in10 additional post petition Attorney fees as noted in example # 6. This mixing of pre-petition payments & post petition payments has resulted in manipulation of escrow funds. In example 3 a past due escrow amount over {$33000.00} which all vary under post petition information and example # 4 discrepancy in the monthly amount due for escrow varies from collected to how it is applied causing partial payments ( unapplied ). In example # 5 the P & I payments are applied differently by the two servicers indicating they chosen accounting style. This example indicates that there are no set rules on how to apply post petition payments. The XXXX XXXX Bankruptcy agreement that I had entered into was to pay my mortgage arrearage, ( pre-petition payments ) to the Bankruptcy Court Trustee while I was still responsible to pay my current mortgage payment due, hence post petition payments. The accounting issue is that the servicer is applying post petition payments to pre-petition balance that is covered by the Trustee payments resulting in creating an inaccurate post petition payment history that concludes I am 7 month in default of my post petition payments therefore preventing me from closing on a new loan. I am being denied the right to refinance because Mr. Cooper choice of accounting practice. There is nothing I am aware of in the XXXXr XXXX that states that post petition payments are to be applied to pre-petition mortgage arrearage. There is nothing in my contractural mortgage that address post petition payment. I am also unaware of how a mortgage servicer has the right to deny me the opportunity to refinance my mortgage by denying my factual post petition payment history.