Consumer complaint received 2019-05-22
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — 
Company: LAKEVIEW LOAN SERVICING, LLC (CA)

We have a conventional home loan with Lakeview Loan Servicing LLC with a second home property. 

In XX/XX/XXXX, we obtained a Brokers Price Opinion ( BPO ) and submitted it to Lakeview with a request to verify the loan to value ( LTV ) requirement so we could pay the loan down to 78 % of the original value of the property. We desired this information in order to eliminate private mortgage insurance ( PMI ) from our monthly loan payment.

The BPO was higher than the original mortgaged loan of the property. Lakeview 's response was that our PMI would actually increase if we used that BPO and they provided a higher principle curtailment to reach the appropriate 78 % threshold. This obviously worked against our financial desires, so we dropped that request. 

We requested in writing on XX/XX/XXXX for PMI to be removed on the loan, accompanied by a check applied to principal bringing the LTV below the 78 % threshold. Lakeview initially incorrectly applied the principal payment, distributing it as a monthly payment, PMI payment, and the remaining to principal. We have a normally scheduled payment that  automatically/electronically pays at the beginning of the month, so applying this payment in such a manner was not in accordance with our written instructions, and also not appropriate as we remained current on our loan payments ( as has always been the case ). An email to customer service was not answered. A phone call to customer service allowed the large payment to be applied to principal, but PMI was not able to be credited back, per the customer service attendant. 

A letter from Lakeview was mailed on XX/XX/XXXX and received on XX/XX/XXXX detailing the requirements to cancel PMI. This letter acknowledges that LTV had been met for the loan, but Lakeview is now requesting a BPO to ensure the current value has not decreased below the original purchase value of the home. They also state that if we want to cancel the PMI, a BPO is " required ''. This letter also states that the cost of this BPO is {$100.00}, payable to Lakeview, who will conduct the BPO.

Considering our previous interaction with this mortgage company, I am not trusting of their motivations, nor do I believe they are adhering to their own annual PMI disclosure statement. That statement requires a BPO when requesting cancellation of PMI at the 80 % threshold with several other requirements. The disclosure also says PMI will be automatically cancelled at 78 % based on the original amortization schedule. I understand we have reached 78 % earlier than that schedule, but their disclosure does not say a BPO is required in such a case.

Their letter also states the need for a BPO as being related to ensuring the property has not decreased in value. That reasoning is null as we would have already overpaid on the loan principal if that were the case.

I understand there are industry best practices, however, it seems reasonable in this case, that Lakeview is simply pushing for more fees to which they are not legally entitled and needlessly harassing a debtor that has remained current on all payments and is making reasonable requests according to published policies.

Issues requiring resolution : 1. Is Lakeview required to automatically drop PMI when the LTV reaches 78 %, either through amortization, or with principle curtailment?

2. Is a BPO legally required in this case, as the LTV is below 80 %, actually currently below 78 % on the loan.

3. Is it legal for Lakeview to require us to pay for a BPO, chosen and serviced by their company, which could easily work on their behalf?

4. Please explain why Lakeview is justifying the reasoning for a BPO to " ensure that the current value has not decreased below the original value of the property ''.

Thank you for your time and assistance.