Consumer complaint received 2022-04-23
Product: Mortgage — VA mortgage
Issue: Trouble during payment process — 
Company: Onity Group Inc. (WY)

To whom it concerns, I am filing a complaint about our mortgage loan servicer, PHH Mortgage ( XXXX ) in XXXX XXXX XXXX  In summary, for our VA mortgage, PHH has mislead us, resulting in financial hardship on us, and also PHH failed to pay our homeowners insurance timely, resulting in financial hardship on us.

First complaint, PHH provided inaccurate information, which led to at least 10 months of paying an excessive amount of principal balance outstanding. 

XX/XX/XXXX : Purchased house with {$510000.00} loan originated by XXXX XXXX XXXX Confirmed with XXXX XXXX XXXX that it would be possible to make a lump sum payment after our old house had sold and reduce the monthly payment accordingly. 

Between XX/XX/XXXX and XX/XX/XXXX : I spoke with a PHH Customer Service Representative. First, I requested they correct our address, which they did. I asked if we could make a large lump-sum payment that would be applied to the principal balance outstanding. They confirmed. I asked them if we could reamortize the mortgage to match the lower principal balance outstanding. They said yes, the process is called " recasting. '' Recasting would mean no change to the interest rate, no change to the maturity date, and said that the request was subject to investor approval. They also told me that I should submit the request to their ARMs department, that I needed to make the request within 180 days of the funds posting to the account, and that it would take 10 days to process. There would be a form we would have to sign and have notarized and return. At that point it would take an additional 5 days to execute the agreement. They provided me with wiring instructions. Note : at no point, although the CSR was looking at our account, did they tell me that VA loans are not eligible to be recast. 

XX/XX/XXXX : {$300000.00} wire received by PHH Mortgage and applied to our principal balance outstanding. XXXX XXXX : {$210000.00}. New monthly payment should have been approximately {$1100.00}, a reduction from our current amount of {$2300.00}. 

XX/XX/XXXX : First monthly payment of {$2300.00} received by PHH Mortgage and applied correctly to our account. 

XX/XX/XXXX : I spoke with a PHH Customer Service Representative. They confirmed the receipt of both the wire and the first monthly payment. I confirmed the instructions on how to request the recast. Again, at no point did they tell me that VA loans are not eligible to be recast. I immediately followed the instructions ( see email thread below ). 

XX/XX/XXXX : Email received from PHH ( see email below ) stating that VA loans are not eligible to be recast. 
Customer XXXX To : XXXX XXXX Wed, XX/XX/XXXX at XXXX PM Dear XXXX and XXXX, This is to confirm the payment of {$300000.00} was received and applied towards the principal balance on XX/XX/XXXX. 

Please note the account is a Veteran Affairs ( VA ) account and VA accounts are not eligible for a recast. 

For your protection, we have removed any personally identifiable information from your original inquiry. If you have any further questions, please contact us through our website at www.mortgagequestions.com or call Customer Care at ( XXXX ) XXXX during the following hours : Monday Friday XXXX XXXX ET PHH Mortgage Services , LLC XXXX XXXX XXXX XXXX XXXX, NJ XXXX late XXXX, XXXX : Second monthly payment of {$2300.00} paid XX/XX/XXXX : Desperate for relief, I emailed the VA to find out what our options were. XXXX XXXX from the VA called me back to say that there are two : to be eligible for the first, your interest rate must be high enough that the mortgage servicer can drop it by at least half a point. Ours is at XXXX so that is not an option. The second is a new VA loan " rate and term '' where the servicer does what we requested in the first place, adjusting the monthly payment to the new principal balance outstanding, keeping the interest rate and the term of the loan the same. Unfortunately, and this is what I wish the servicer had told us beforewe paid off over half of our originated amount before our first monthly payment was due, the VA prohibits this from being done within 6 months of the first payment being made. In addition, PHH is permitted to charge us reasonable fees for this option. If you've seen the news, you'll know that PHH has been sued last year and this year by multiple state attorneys general for charging unreasonable fees. 

late XXXX, XXXX : Third monthly payment of {$2300.00} paid. Note that {$1600.00} of that went to principal, which means that we are paying about {$500.00} more per month in principal more than our total monthly payment should be. 

late XXXX, XXXX : Fourthmonthly payment of {$2300.00} paid late XXXX, XXXX : Fifthmonthly payment of {$2300.00} paid late XXXX, XXXX : Sixthmonthly payment of {$2300.00} paid. At this point, if we keep up paying this amount each month, we would pay off our 30 year loan in 109 months ( 9 years ). 

XXXX XXXX, XXXX : Filed complaint with State of Wyoming. In response to this part of the complaint ( see Response PHH XXXX document ) PHH offered to return our {$300000.00}. I responded to the State of Wyoming with the below, but because this is out of their jurisdiction, they could not provide further assistance. They mentioned that I could complaint to CFPB. 

XX/XX/XXXX, Response to State of Wyoming about PHH Offer 1 : I have spoken with the VA. PHH is correct, that VA loans are not eligible to be recast. If only they had bothered to be correct back in XXXX. But moving on from that, their first offer at resolution is moot. Everyone now knows that our mortgage can not be recast. However, VA loans are eligible for a " rate and term '' function. Basically it is the same as a recast. The rate remains the same. The term remains the same. The amount billed per month is adjusted to meet the current principal balance outstanding. So for example, in our case, our rate would remain the same, the term ( originally 30 years ) would remain the same, and the payment billed per month would be based on approximately {$200000.00} instead of {$510000.00} principal balance outstanding. That is what I requested to be performed as soon as our loan was eligible, as it should be because we have made 6 monthly payments on time for the full amount. The key difference is that I requested for the " rate and term '' to be done without any fees paid by us ( either out of pocket or by folding the fees into the principal balance outstanding ). According to the VA, the " rate and term '' is permitted to be done with reasonable fees being billed. The recast is done without any fees. I am requesting PHH honor their original statement of adjusting our payment amount without any fees being paid by us. It should not matter whether it is called a recast or a " rate and term '' - the concept is the same, the difference is in the name and whether PHH will bill us fees ( recall that the class action lawsuits against PHH are for excessive fees ). 

XX/XX/XXXX Response to State of Wyoming for PHH Offer 2 : Returning our {$300000.00} to us would trigger reamortization of the 6 monthly bills we have paid, radically reducing the amounts applied to principal balance outstanding and radically increasing the amount of interest paid, padding PHH 's bottom line and leaving us on the hook for XXXX XXXX and XXXX XXXX dollars more interest over the life of the XXXX we will pay from having made the initial lump sum payment. I reject their unbelievably self-serving offer. 

Note that the calls PHH made to my phone were identified by my caller id as being made from phone numbers XXXX XXXX XXXX XXXX XXXX XXXX  '' - numbers that are identified with spam calls. I am glad I did not take the calls because I'm sure they would have pressured me to make a choice that would harm myself and my husband. Also, their website is " www.mortgagequestions.com '' which does not give me any confidence in their company. 

Late XXXX, XXXX : Seventh monthly payment of {$2300.00} paid Late XXXX, XXXX : Eighth monthly payment of {$2300.00} paid XX/XX/XXXX : I emailed PHH Mortgage to inquire how much the fees would be to have the new rate and term loan their emailed response said I needed to call their phone number to discuss. 

Late XXXX, XXXX : Ninthmonthly payment of {$2300.00} paid Late XXXX, XXXX : Tenthmonthly payment of {$2300.00} paid XX/XX/XXXX : Called PHH to discuss the new rate and term loan. I spoke with XXXX, who answered my call, and then forwarded me to an escalation manager XXXX, PHH agent # XXXX. Neither XXXX nor XXXX knew what a rate and term loan was so I explained it to both of them, and I clarified that VA loans were not eligible for recasting. Neither seemed to be aware that VA loans were not eligible to be recast, nor of the rate and term loan. XXXX confirmed that PHH received {$300000.00} on XX/XX/XXXX. He referred to the letter triggered by my complaint to the State of Wyoming in which PHH offered to return the {$300000.00}. I said emphatically that I do not want PHH to return the funds. He said that he did not see any options for VA loans to reduce the monthly payment. He consulted with the resolution team and confirmed that there are no options for VA loans to reduce the monthly payment, and that I would need to send them a written copy of the policy if such an option existed. 

XX/XX/XXXX I emailed XXXX from the VA with the update. In response she left me a voicemail. According to the VA : Rate and Term loans do exist, we have met the seasoning requirement, and this option would be appropriate in our case. Also she said we do not have to stay with the same mortgage servicer. 

*************************** Second complaint, PHH did not pay our homeowner 's insurance. State of Wyoming was able to resolve this complaint but I still want this to be on record with CFPB. 

XX/XX/XXXX : Purchased house. Homeowners insurance was XXXX. Homeowner 's insurance was paid to XXXX at the closing table. 

XX/XX/XXXX : Changed homeowner 's insurance to XXXX XXXX in XXXX. XXXX XXXX said they would bill PHH and we provided them with PHH 's contact information and our mortgage account information. 

XX/XX/XXXX : Spoke with PHH Mortgage Customer Service Representative. Notified them that we changed from XXXX to XXXX XXXX. Inquired about the escrow account not having enough money to pay the homeowners insurance. CSR told me that PHH will pay XXXX XXXX the homeowners insurance bill even though the escrow account would go negative. The annual escrow analysis would fix the issue when that was performed. 

XX/XX/XXXX : Received notification that PHH had not paid our homeowners insurance.See first attachment, file name ending in XXXXImmediately emailed PHH ( see email thread below ). 

XX/XX/XXXX : Without any confirmation from PHH that they were going to pay the bill from the email thread below, and knowing that the policy would be cancelled XX/XX/XXXX, I went to XXXX XXXX in XXXX. They confirmed that PHH had not made any payment. I paid my homeowners insurance : {$1500.00} XX/XX/XXXX, 5 days before the insurance was scheduled to be canceled and a day after I paid it myself, PHH mailed me the notification that my insurance policy expired, and that they would purchase coverage on my behalf. First page of the letter is shown in attachment with file name ending in XXXX XX/XX/XXXX : With three days to go before the insurance was scheduled to be canceled, PHH mailed me notification that the insurance status was resolved on my account.First page of the letter is shown in attachment with file name ending XXXX First week of XXXX, I called XXXX XXXX to find out if I was going to be refunded my money because surely PHH had rectified their mistake. But no, XXXX XXXX confirmed that PHH had madeno attempt to pay my homeowners insurance.

PHH did pay the homeowners insurance and I received a refund from XXXX XXXX. In response to their written communication : I take issue with the presentation. IF it is true that they attempted to make payment on the same day I paid the hazard insurance, XX/XX/XXXX, why did they send me correspondence on XX/XX/XXXX informing me that the policy had expired ( it was not going to be canceled until XX/XX/XXXX ) and that they planned to purchase hazard insurance for us?