Consumer complaint received 2023-07-06
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — 
Company: FIFTH THIRD FINANCIAL CORPORATION (PA)

On XX/XX/XXXX, I purchased a home for a purchase price of {$180000.00} and as part of the purchase the appraised value of the property was {$190000.00}. 

During the fall of XXXX, my mortgage loan was sold at least once- perhaps twice, but my recollection is unclear. My servicer for my loan became 5/3 Bank, with whom I have primarily dealt, but the mortgage is now held by the XXXX XXXX XXXX XXXX ( XXXX ). 

By XX/XX/XXXX, I had sufficiently paid down the balance of my mortgage to under 80 % of the {$180000.00} purchase price. I submitted a request to my mortgage servicer to cancel the private mortgage insurance ( PMI ) on my loan. 

This request was denied, and I received a letter claiming that this was due to either the current value of my property being unable to be determined by the XXXX or that the value was determined to be below the original value. The letter instructed that in order to proceed with cancellation of the PMI, I would need to pay for either an appraisal or a broker price opinion on the property. 

I contacted 5/3 customer service several times to discuss the specifics of my situation, including submitting a new request for cancellation along with the appraisal used as part of the purchase. This appraisal was performed less than one year ago, and returned a value substantially higher than the purchase price of the home. Again my request was denied. I also made additional curtailment payment on my loan, bringing the principal down to an amount at which any current value above {$180000.00} would allow me to satisfy the 80 % loan to value ratio. 

I also sought clarification from 5/3 whether the cause for denial had been an inability to determine the value of my property, or a determination that it was less than the original value. Despite multiple requests to different agents they said they were unable to tell me which cause applied in my case. 

I additionally asked 5/3 if they could provide me with the valuation that had been returned by XXXX to be used for the 80 % calculation, so that I could know what amount I would need to pay the principal down to in order to cancel PMI without paying for a new appraisal or BPO. 5/3 stated multiple times, and from multiple members of different customer service and escrow teams, that they could not provide me with this number. 

I also reached out to customer service at XXXX, to see if I could receive from them the calculation of current value that was being used to deny my request. During that conversation, I was told that only my servicer could provide me with that information, but that generally if a servicer refuses to provide that information it is because no valuation was returned by XXXX 's system. The agent further informed me that this is not an uncommon complaint, and that XXXX 's system being unable to return valuations on properties is relatively typical, and not considered a failure in need of fixing. 

I was therefore left to assume that XXXX was unable to calculate a valuation for my property, but notably was told that it is impossible for me to confirm this, as neither 5/3 nor XXXX will actually tell me explicitly that this is the case. I confirmed with the representative from XXXX that in this situation, the inability to calculate a valuation will persist, and is not something that can be resolved, and so I would either have to continue to pay PMI until the originally scheduled termination date on my loan ( nearly 10 years from now ) or pay for a new valuation estimate myself. 

I also discussed with representatives from both companies the implausibility of the claim that my home 's current value has declined sufficiently to prohibit cancellation of my PMI. In order to have reached a current value low enough to prohibit PMI cancellation, my home 's value would have had to decline by 8 % in the space of less than one year. While this may be plausible in some markets, I noted to the agents that my property is located in Pennsylvania, and that according to the Federal Reserve Economic Data, the All Transactions House Price Index for Pennsylvania has continued to rise from XXXX XXXX to XXXX XXXX. 

I am submitting this complaint with regard to multiple issues with how both 5/3 and XXXX have handled this process. First, I believe that it is a harmful consumer practice that XXXX itself apparently calculates the current value of properties, but is unwilling to discuss these valuations- or its inability to calculate one- with property owners. It is additionally harmful that 5/3 as a servicer is unwilling to provide to consumers the actual details of this valuation- whether it exists or not, or the dollar figure of the valuation returned. 

I am aware of the provisions of the the Homeowner Protection Act of 1998 as they relate to PMI, and appreciate the law 's inclusion of proof that may be needed to satisfy the lender 's requirement for showing that the value of a property has not declined. I do not think that law provides a license for lenders or servicers to establish a system whereby- no matter the prevailing market forces or the unlikelihood a property has declined in value- the barrier of valuation and the ordering of a new appraisal/BPO can be made into a routine burden on the property owner due to the failure of XXXX 's system to provide a valuation on a property, or an unreasonable claim by a lender that a property has declined substantially in value in a short period of time and counter to market trends. 

The expenses incurred by consumers because of these practices on the part of XXXX and 5/3 are substantial- not only am I now expected to pay for a new appraisal or BPO myself, at a cost of at least {$200.00}, but I have also been required to pay several months of additional PMI, with further months likely to be paid while a new appraisal is scheduled, performed, and returned to the lender. The total unreasonable cost in this instance is likely to be between {$500.00} and {$1000.00}. 

While I am submitting this complaint, I am also returning to 5/3 a letter ordering a BPO on the property, as I am unwilling to continue to pay unnecessary PMI for an unknown number of months while the issue is resolved.