Consumer complaint received 2023-05-02
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — 
Company: Onity Group Inc. (NC)

I was trying to payoff my loan with PHH Mortgage Services in XXXX, XXXX. I sent a final payment of {$5000.00} on XX/XX/XXXX. The remaining loan balance at the time was {$4500.00}. 
PHH held my payment & did not apply it to my balance. When I saw the money had left my bank account, I checked online at PHH 's portal and saw the money was " unapplied '' but received as a payment. 
On XX/XX/XXXX, I called PHH to find out why they would not apply my funds to my loan balance. I was told that since the payment was more than the balance they would not apply it until I requested a loan payoff quote. Had I not called, I would not have known this requirement. I was told ( on a recorded line ) that once the payoff quote was received, the funds would be applied. I requested the payoff quote & got confirmation that I DID NOT need to make my monthly payment on XX/XX/XXXX, because they already had plenty of funds being held. 
On XX/XX/XXXX, I checked to see if the {$5000.00} had been applied to my loan balance. It had not & I had not received a payoff quote from PHH. 
On XX/XX/XXXX, I received a secure email from PHH that contained the payoff quote letter. The email letter said the payoff was good until XX/XX/XXXX ( already past that date when I was sent the quote ) & the payoff amount was {$5300.00}. I checked the PHH portal & saw my {$5000.00} had still not been applied to my outstanding balance ( they held the money 7 days, while my loan balance continued to accrue interest & quoted a payoff balance on XX/XX/XXXX based on {$4500.00}, instead of what should have been a zero balance or {$1.00} balance on XX/XX/XXXX ). 
On XX/XX/XXXX, I called PHH again & spoke with a supervisor in the USA, ( after requesting to speak to a US based rep ). XXXX XXXX XXXX came on the line and told me that I had to wire or send certified funds for the difference between the XXXX XXXX they were holding & the payoff quote amount from XX/XX/XXXX, PLUS additional interest of XXXX XXXXXXXX day before they would credit my XXXX XXXX to the loan amount. I explained the history listed above in this complaint, and that I should, at a minimum not be held responsible for interest charged between XX/XX/XXXX when the payoff quote was generated & the delivery of that quote to me on XX/XX/XXXX. She did not agree and repeated that the only way PHH would apply the XXXX XXXXXXXX I sent them on XX/XX/XXXX, was when they received the additional {$330.00} PLUS extra days interest after XX/XX/XXXX. 
My contention is this - PHH Mortgage Services is committing consumer fraud, by intentionally w/holding customers funds received by them to pay down loan balances, when they realize the loan is about to be paid off, thus continuing to accrue their interest. Then when the payoff quote is requested by the consumer, they delayed delivery of that quote, until after the quote expired, to collect additional interest charges from the consumer ( me in this case ). 
My payoff quote on XX/XX/XXXX, should have been calculated from a loan balance of {$0.00}, or {$1.00}, after my {$5000.00} payment was received on XX/XX/XXXX which was greater than the published loan balance. By failing to apply funds they received 3 days prior to the payoff request date, they were able to generate additional interest accrual on the high loan balance, thus increasing their profits at the loan termination. They intentionally withheld money that was sent them to pay down the loan balance for at least 7 days, as I still do not have proof that my funds will be applied despite sending the wire transfer for the additional closing costs on XX/XX/XXXX. 
Please investigate this deceptive practice of profit generation by this regulated lender. I'm sure you will find that I'm not the only one they have done this too. 

1 additional piece of information - as I was sending bi-weekly payments to PHH through XXXX & XXXX to payoff this loan early, they would not apply all the payment to the loan principal. They would credit a portion of the payment to the next month 's payment, and take the interest. I noticed after 3 large payments that PHH had credited my monthly payments through XXXX, XXXX, despite my payment notices that I was making " principal payments only '' and not a monthly loan payment. After I called and complained, PHH reversed the interest charges and applied all the funds to the principal, but had I not been watching the account - they would have been collecting interest that should not have been accrued due to a higher loan balance, & they were extending the length of my loan, when I was trying to pay it off early. Deceptive accounting practices where in place until the consumer notices and complains.