Consumer complaint received 2024-01-05
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — Escrow, taxes, or insurance
Company: Onity Group Inc. (MD)

My wife and I purchased our home with approximately 25 % down in XXXX of XXXX and took out a loan through a different company ( not PHH ). We were told it was common for first time homebuyers to use an escrow account to manage the payment of the insurance and property taxes, so we agreed to the escrow account. In XXXX of XXXX, we were informed that our mortgage was being transferred to PHH. PHH sent us a welcome video and package and we were told that the escrow account would still be used for our insurance and property taxes. We have experienced mismanagement of the escrow account for the past year. PHH has : 1 ) Incorrectly calculated the taxes we needed to pay, causing us to pay from our own pocket and leading to several unnecessary escrow advances.

2 ) Not paid our taxes in full or in a timely manner, causing us to pay from our own pocket and potentially leading to a late penalty of {$16.00}.

3 ) Lost one of our tax payments, causing us to be out {$800.00}.

4 ) Not paid our insurance bill on time, causing us to be without homeowners insurance for a week and a half.

5 ) Neglected to communicate adequately with us, our insurance company, or XXXX XXXX finance office. 
Our insurance was due to XXXX on XX/XX/XXXX. XXXX XXXX allows payment of property taxes twice a year, once by XX/XX/XXXX and once by XX/XX/XXXX. 
We received our property tax bill on XX/XX/XXXX and saw that we owed {$2300.00} by XX/XX/XXXX and {$2300.00} by XX/XX/XXXX. As the XXXX deadline approached, we checked the PHH portal and found that they had scheduled a payment of {$800.00} from escrow on XX/XX/XXXX. That was not enough to pay the full amount of our tax bill. We called PHH on XX/XX/XXXX to determine why they had not paid the correct amount for our taxes. They suggested that they had the wrong property ID and suggested that we send the tax bill to them through email. When we asked if they would pay the correct balance on time, they said it would take XXXX to XXXX business days to pay the correct amount, which would have been past the due date. We paid the remainder of the tax bill, {$1500.00} out of our own pockets to cover the remaining balance of the bill on XX/XX/XXXX. We thought our taxes for XXXX had been paid, but XXXX XXXX finance office said they did not receive the {$800.00} payment made by PHH from our escrow account. On XX/XX/XXXX, PHH made another {$800.00} payment from escrow. This was received by XXXX XXXX finance office on XX/XX/XXXX along with a payment of {$16.00} that appears to have come from our mortgage payment and not our escrow account. The {$16.00} payment is labeled as a late fee/penalty and is listed as paid on XX/XX/XXXX, one day after it was received by XXXX XXXX finance office. No other information was ever provided about this late fee/penalty. On XX/XX/XXXX, PHH disbursed {$2100.00} from the escrow account back to us before paying the remaining tax bill, causing our escrow account to go into the red and requiring an escrow advance once the tax bill was paid. On XX/XX/XXXX, PHH scheduled another payment of {$2300.00} to pay the remainder of the tax bill due on XX/XX/XXXX. This caused our escrow account to go negative and required an escrow advance. At this point, our escrow account was at {$0.00} and the insurance had still not been paid. The miscalculation of our tax bill combined with us paying {$1500.00} out of our own pockets on XX/XX/XXXX, has resulted in an overpayment of our taxes by {$8.00}. The missing {$800.00} payment made on XX/XX/XXXX, is in the process of being repaid. PHH told me on XX/XX/XXXX, that it was missing due to having the incorrect property ID. 
I called PHH on XX/XX/XXXX and XX/XX/XXXX and spoke with XXXX ( employee number XXXX ) about the miscalculation and untimely payment of our taxes and requested to have the escrow account closed. He told me that they use a third-party company to try to calculate our property taxes and that the other company must have made a mistake on how much we owed. He also told me that they did not have the correct property ID again, despite us sending the property tax bill in XXXX, which contains the property ID. XXXX also told me I would have to wait until XXXX to submit a request to close the escrow account and it would take XXXX to XXXX business days to process the request. I asked XXXX if there would be trouble paying the insurance bill at the end of XXXX from our escrow account since it was now empty due to the disbursement and incorrect tax payment calculation. XXXX assured me that the insurance bill would be paid, it would just require another escrow advance. I noticed that there was a scheduled payment of approximately {$1000.00} for our insurance bill pending on the portal, so I assumed that the insurance would be paid. We later noticed on XX/XX/XXXX that the scheduled payment had disappeared from the portal. On XX/XX/XXXX, we noticed that our insurance had not been paid from our escrow account. 
I called PHH on XX/XX/XXXX and talked to XXXX ( XXXX XXXX XXXX ) who connected me with XXXX ( I missed her employee number ) in the insurance department. I was told by XXXX that they had been unable to contact XXXX insurance since XX/XX/XXXX, so XXXX insurance did not know the mortgage had been transferred to PHH. The bill I received from XXXX insurance supported this, as it was made out to XXXX XXXX XXXX. I asked whose responsibility it was to alert XXXX insurance that PHH would be paying from the escrow account and XXXX told me it was PHHs responsibility. I later spoke with XXXX XXXX and XXXX from XXXX on XX/XX/XXXX, who were able to overnight the full amount of the bill to XXXX by XX/XX/XXXX, with an expected date of processing the check and resuming coverage on XX/XX/XXXX or XXXX, XXXX. I have tracked the overnight check, and it was received by XXXX at XXXX XXXX  on Friday, XX/XX/XXXX. XXXX stated that they regularly have difficulty contacting XXXX insurance and that they had tried to contact them in XXXX and again in XXXX and XXXX. She said that it was my responsibility to inform XXXX insurance of the change in my mortgage provider and escrow account and that they had tried to contact me about it on XX/XX/XXXX, by phone and mail. I never received a phone call from PHH on XX/XX/XXXX, and I was traveling during the holidays and unable to receive mail. I will also note again that the due date for renewing insurance coverage was XX/XX/XXXX. Rather than contacting me about the inability to reach my insurance company at any time since XXXX, PHH waited until two days before the due date for the bill.