Consumer complaint received 2019-02-12
Product: Mortgage — FHA mortgage
Issue: Trouble during payment process — 
Company: EMBRACE HOME LOANS (IN)

We have our mortgage through Embrace Home Loans, and it is serviced through XXXX XXXX XXXX XXXX. This current mortgage was originated on XX/XX/XXXX, with the original loan amount at {$170000.00}, and the first payment was due on XX/XX/XXXX. 

For this loan, as we had done for some of our past mortgages, we again employed the services of XXXX XXXX ( XXXX ' ). This program was set up such that XXXX  would pull a set amount out of our checking account each payday and to make the mortgage payments for us - all in advance of the due dates. This was set up and was working without a problem until one evening when I received a collection call from XXXX stating that my mortgage payment was delinquent ( which funds had previously been deducted by XXXX XXXX and forwarded to XXXX ). 

The next day I called XXXX  XXXX and found out that XXXX had 'changed their procedures ' and was no longer accepting electronic payments from XXXX  , forcing XXXX  to make all such payments by paper check. In switching over to paper checks, I determined from XXXX, they also had longer wait periods so as to make sure that my funds did not bounce. These delays caused my payment to be received late. I believe at that time I did speak with a representative of XXXX, and they did waive the late fee due to the circumstances. 

So that we would not have any further problems, we discontinued using XXXX. I set up bi-monthly payments through our bill pay service with our bank such that the XXXX payment would be paid 1/2 on XX/XX/XXXX, and the other half would be paid out of my XX/XX/XXXX check. I advised XXXX as to what I was doing and at that time filled out their payment logic form and returned it to them. But our problems did not stop. 

Every month I would get a phone call and/or an email stating that our payment had not been received. Each month I had to call XXXX and explain that the payment had been paid in full by approximately the XXXX of the month. Evidently they ignored the prior payment logic request and I was asked filled out a 'new ' payment logic form for XXXX on XX/XX/XXXX. I did complete the new Payment Logic form and submitted the same back to XXXX on XX/XX/XXXX, a copy is attached. The new Payment Logic, as it was explained to me both verbally and in writing, stated that as long as my monthly payment was paid, they would allow prepayment up to one month in the future before any excess funds ( payments ) would be credited as a principal reduction. Basically my partial payment would be held in suspense until they received the full amount ; which would then be properly credited to our account. 

This has not happened. Every month my payment is misapplied. Every month I get collection calls from XXXX and must go through the entire ordeal with them. My mortgage payments are never late - they are paid in advance. 

I've asked that they note my account as to my payment schedule - which I do not know if they have done, but I continue to get calls and emails monthly stating my payment is 'still due '. I got another of those emails this morning ( XX/XX/XXXX ), when the 2nd half my XXXX payment had by XXXX on XX/XX/XXXX. 

Every time I talk with XXXX, they explain that they do some type of 'sweep ' of the accounts each month and pull over all funds in suspense - which is the direct opposite of the Global Payment Logic/Default Logic applied to all accounts. They then look at my account, see the mistake, and take steps to reverse the misapplication. It is usually at this point when the representative tells me that this would not be happening if I agreed to use their bi-weekly payment service. 

I do not get paid weekly or bi-weekly. I get paid twice a month on the XXXX and last day of the month - therefore I need to have the payments anchored to those pay dates. 

I feel that we are being pressured to use XXXX 's bi-weekly payment service due to their 'change in procedure ' which initially caused us to cancel with XXXX. We have never missed a payment, even when we switched from XXXX  to making the bi-monthly payments through our banks bill pay service. I also feel that they are discriminating against us in that they offer weekly and bi-weekly payments, but now are saying that they do not have any other way to handle the bi-monthly payments - even though their Payment Logic form has been filled out and sent to them twice! 

At one point in time, I was so frustrated, that I did contact our lender, Embrace Home Loans, and asked for their help. That helped for the current month, but thereafter XXXX still continued to misapply our payments. 

I feel that XXXX 's continued monthly misapplication of our payments and monthly ( wrongful ) harassment is leaving us no choice but to seek a refinance with a completely different lender. If we do this, then we will lose a great interest rate of 3.875 %. Additionally, I am very concerned as to how their misapplication of payments will show on our credit reports. Lastly, I feel that WE should not be the ones that must absorb additional loan fees, closing costs, or additional interest ( higher rate ) to just get away from XXXX. 
Can you please help?