Consumer complaint received 2018-04-20
Product: Mortgage — FHA mortgage
Issue: Trouble during payment process — 
Company: Freedom Mortgage Company (GA)

Prior to XX/XX/XXXX, I carefully examined my closing documents regarding PMI and how this can be removed. The documents stated that it could be removed once the loan balance was below 80 % of the original sales price ( defined by the lesser of the original sales price or, the appraised value of the home as the time it was purchased ). It should be noted that the original sales price was {$88000.00} in XX/XX/XXXX. The appraisal at the time of purchase was approximately {$100000.00}. Once I reviewed the closing documents I determined that the request to remove needed to be made in writing, I must have the loan in good standing with no late payments, the loan is currently in good standing and that the mortgage company " may '' at my expense require evidence that the property value has not declined below the original sales price of the property. I contacted Freedom Mortgage on XX/XX/XXXX to confirm the steps I needed to take above and was told that was correct. I then made my XX/XX/XXXX mortgage payment and included substantial extra money towards the principle to bring the outstanding loan principle balance below 80 %. Additionally, I subsequently submitted the written request as outlined on XX/XX/XXXX. I contacted Freedom Mortgage on XX/XX/XXXX and spoke with XXXX who advised me that an appraisal was required and that a letter would be forthcoming. I asked why would an appraisal be needed when the appraisal from just over two years ago showed the value north of 21 % of the original sales price at that same time along with the fact that I can provide proof that I have made various enhancements ( new roof, new HVAC, new carpet, siding repairs etc ... ) and that the sales prices for all homes in the subdivision now exceed {$150000.00}. He stated for me to email an appeal stating these facts. On XX/XX/XXXX, I received the letter dated XX/XX/XXXX that XXXX had referenced. It stated that I needed to contact a specific vendor " XXXX '' to have the appraisal done. I contacted them and learned that their fee for the appraisal is {$470.00}. That is roughly 58 % higher than the average of {$300.00} that I found for a single family home appraisal in my area. Additionally, it is {$75.00} more than I would be saving with the early elimination of PMI as it is already slated to end XX/XX/XXXX according to the loan closing documents ( provided there are no more Freedom Mortgage " gotchas ''. The PMI is roughly $ 50 monthly and this would be over 8 additional months ( XX/XX/XXXX through XX/XX/XXXX payments = 8 months ) or, {$400.00} total in potential PMI savings. So, again I pay {$470.00} to save {$400.00}. Here are my fundamental issues that Freedom Mortgage could not answer and that I feel are highly unfair and unethical mortgage practices as it relates to PMI. 1 ) Freedom Mortgage states I " must '' submit an appraisal. My documents do not say this and only say that I " may '' be required to submit proof that the home value has not fallen below the original sales price ( I can easily do this as mentioned above ). How can they require this appraisal when the loan documents do not implicitly state this? 2 ) If proof " may '' be required, when is it NOT required. You would think that if it IS required, it would state that as opposed to it " may '' be requested. 3 ) They state I must use their one specific vendor for the appraisal. No where do my loan documents state this. How is this legal/enforceable? 4 ) The fee " their '' vendor is extraordinarily high and far exceeds fair market value of appraisals in my area of {$300.00}. What recourse do I have with this excessive fee. This entire situation wreaks of unethical, unfair and unscrupulous behavior by Freedom Mortgage here. The contract I signed and common sense must prevail here.