Consumer complaint received 2024-07-30
Product: Mortgage — FHA mortgage
Issue: Struggling to pay mortgage — Foreclosure
Company: Onity Group Inc. (MI)

XXXX XXXX, A HUD Certified Housing Counselor at the XXXX XXXX XXXX XXXX XXXXXXXX helped me complete this applicaiton. 

We are unable to contact PHH Mortgage Servicing. It seems that any calls linked to customer account # and/or social security # are immediately routed to a voicemail box. This is even true when dialing the customer service general line. Calls made on XX/XX/XXXX, XX/XX/XXXX and XX/XX/XXXX. How is this a legal practice to cut of communications. I encourage you to try to call them with my account # ( secret shop ) and hear it for yourself! 

My customer, has submitted several hardship applications with PHH and received no help in resolving his mortgage delinquency. PHH has admitted fault for closing his loan modification offer to give him a previous offer, resulting in a lower payment. When PHH determined that he was not eligible for the previous offer, they hired a notary to take care of the new modification and proceeded to REJECT the paperwork from their own notary. They resolved their errors, by sending a letter that simply apologized for the inconvenience and offered XXXX actual resolution. 
Nothing has changed from his situation since these two loan modification approvals that somehow ended in denials. He is no longer eligible for loss mitigation through PHH, simply because he has had too many applications in this delinquency cycle. If not for PHHs false promise of a lower payment, my customer would have his delinquency resolved and be in current, good standing with his mortgage. 
Additionally, the only options My customer has been evaluated for dont seem to have reasoning behind them. I dont agree with the math used in the XXXX XXXX XXXX Partial Claim. He seems to have more than enough available for a partial claim. Even with his loss mitigation denials, PHH has provided no evaluation or evidence that he was ever evaluated for any other options. I have attached the FHA issues worksheet that determines My customer is eligible for the Covid Partial Claim with payment supplement option. Please address this notice of error and assist in resolving My customers mortgage delinquency so that he can retain ownership of his home and get back on track. 
As a HUD Certified Housing Counselor, I also question the fair lending practices of PHH mortgage. Around XX/XX/XXXX, I was with My customer, on the phone with PHH, and heard XXXX  ( Agent ID : XXXX ) state that he was not allowed to apply through their loss mitigation options : How many times has he gotten behind was the reasoning behind it, right after they sent the letter admitting fault for not properly addressing his ( already approved and open ) loss mitigation application. 
On XX/XX/XXXX, I was again with My customer, and we contacted XXXX ( agent ID : XXXX ) and he seemed to acknowledge that My customer was not properly evaluated under FHA loss mitigation guidelines and agreed to send out a new application. This now seems to have been a strategy to allow the loan to continue to fall into the already planned foreclosure advertisements. 
My customers home has a modification denial, dated XX/XX/XXXX AND a PUBLISHED Foreclosure Advertisement also dated XX/XX/XXXX. If the loss mitigation application was being evaluated, the foreclosure proceedings should have been paused. How is it possible to deny an application and get a published foreclosure advertisement on the exact same day? 



12 CFR Part 1024 ( Regulation X ) ( a ) Live contact. Except as otherwise provided in this section, a servicer shall establish or make good faith efforts to establish live contact with a delinquent borrower no later than the XXXX day of a borrower 's delinquency and again no later than 36 days after each payment due date so long as the borrower remains delinquent. Promptly after establishing live contact with a borrower, the servicer shall inform the borrower about the availability of loss mitigation options, if appropriate, and take the actions described in paragraph 39 ( e ) of this section, if applicable. 

As of XX/XX/XXXX, loan servicers must evaluate all eligible borrowers with FHA-insured mortgages who are in default or facing imminent default using the XXXX loss mitigation waterfall process, regardless of the cause of the borrowers ' financial difficulties. 
Informal or Formal Forbearance Plan : A Forbearance plan allows a borrower to work with their mortgage servicer to temporarily pause or reduce their monthly mortgage payments and may provide specific terms for repayment. No evaluation/determination provided. 
Special Forbearance ( SFB ) -Unemployment : SFB is available when one or more of the borrowers have become unemployed and this loss of employment has negatively affected the borrower 's ability to continue to make their monthly mortgage payment. The servicer will re-evaluate the borrower for a permanent Loss Mitigation Option to cure a Default once the borrower is gainfully employed and/or the SFB-Unemployment Agreement expires. No evaluation/determination provided. 
Standalone Loan Modification : Resolves the outstanding mortgage payment arrearages by adding it to the principal loan balance of the first mortgage and extends the term of the mortgage to 360 months at a fixed interest rate. No evaluation/ provided. 
Standalone Partial Claim : Allows mortgage payment arrearages to be placed in a XXXX-interest subordinate lien against XXXX property. The Partial Claim amount does not require payment until the last mortgage payment is made, the loan is refinanced, or the property is sold, whichever occurs first. No evaluation provided. 
XXXX Recovery Loss Mitigation Options The XXXX Recovery Loss Mitigation Options provide borrowers with options to bring their Mortgage current and XXXX reduce the XXXX XXXX XXXX portion of their monthly mortgage payment to reduce the risk of re-default and assist in the broader XXXX recovery. FHA offers XXXX Recovery Options to borrowers who are 61 days or more delinquent through XX/XX/XXXX. Non-Borrowers who acquired title through an exempted transfer are not eligible for the XXXX Recovery Options and must be evaluated for FHA 's Standard Loss Mitigation Options . 
XXXX Advance Loan Modification ( ALM ) : The XXXX ALM is a permanent change in one or more terms of a borrower 's mortgage that achieves a minimum XXXX percent reduction to the borrower 's monthly principal & interest ( XXXX XXXX  XXXX ) payment and does not require borrower contact. Servicers will proactively mail the modified mortgage documents to borrowers who can achieve the required payment reduction. If the borrower chooses to accept the XXXX ALM they will only need to sign and return the mortgage modification documents sent to them by their mortgage servicer. Not approved. 
XXXX Recovery Home Retention Options : XXXX Recovery Standalone Partial Claim : For borrowers who can resume making their current mortgage payments, the XXXX Recovery Standalone Partial Claim allows mortgage payment arrearages to be placed in a zero-interest subordinate lien against the property. The Partial Claim amount does not require payment until the last mortgage payment is made, the loan is refinanced, or the property is sold, whichever occurs first. Not properly evaluated. 
XXXX Recovery Modification : For borrowers who can not resume making their current monthly mortgage payments, the XXXX XXXX XXXX resolves the XXXX mortgage payment arrearages by adding it to the principal loan balance of the first mortgage, extending the term to XXXX or 40 years at the current fixed market interest rate, and targets reducing the borrower 's monthly principal and interest portion of their monthly mortgage payment. The XXXX Recovery Modification must include a Partial Claim if the borrower has Partial Claim funds available. Approved, but now denied, due to too many applications. Even though multiple applications are a result of PHHs errors. 
Payment Supplement : For borrowers who can not achieve a payment reduction through a XXXX Recovery Modification, the Payment Supplement utilizes Partial Claim funds to resolve the outstanding mortgage payment arrearages and provides a monthly principal reduction payment. This option temporarily reduces the borrower 's monthly mortgage payment for a period of XXXX years. The Payment Supplement XXXX be available to borrowers beginning XX/XX/XXXX, but must be available to all eligible borrowers no later than XX/XX/XXXX. Borrowers may inquire about the availability of the Payment Supplement with their mortgage Servicer. Not evaluated.

My customer has never received any information from PHH regarding several of these options but more specifically the XXXX Recovery Standalone Partial Claim with Payment Supplement Option. I have attached the HUD issued calculation worksheet, which implies that My customer should be approved for the partial claim with a payment supplement option. 

Customer Timeline : ATTACHED