Consumer complaint received 2020-01-06
Product: Mortgage — Other type of mortgage
Issue: Closing on a mortgage — 
Company: Onity Group Inc. (GA)

Violation of the Federal Trade Commission Act ( FTC Act ) section 5 resulting from deceptive practices due to misleading information contained in several loan documents that were issued to me during mortgage closing proceedings. 

After independent study of the Federal Trade Commission Act section 5 which defines Deceptive Practices as the following : An act or practice is deceptive where a representation, omission, or practice misleads or is likely to mislead the consumer ; a consumers interpretation of the representation, omission, or practice is considered reasonable under the circumstances ; and the misleading representation, omission, or practice is material Review of the 3 attached documents, which consist of : Adjustable Rate Rider ARM Disclosure Interest Only Addendum My question here is If the document title truly reflects what is in the contents of the document itself why would the amortization period be referenced at all if the title implies the " Interest Only Payment period ''? 

The Title or Heading of each of the aforementioned documents specifically make reference to the " Interest Only '' period of the mortgage which is a 60 month period ( 5 years ), however the actual terms contained within each refer to the Interest Only period AND leads into the amortization period, which essentially means the life of the mortgage, this is significant as it set a fixed rate of the mortgage for an interest rate of 7.875 % ( the initial rate ) and any downturn in the LIBOR which would decrease the variable rate resulting in lower monthly payment amounts would NOT be recognized. So the Title|Heading of the documents are quite misleading and therefore considered deceptive and should be defined as a violation of FTC section 5. 

For these reasons mentioned I am submitting these details for review by the CFPB with the intention to correct all wrongdoing. 

Closing Date : XX/XX/XXXX Loan Amount : {$290000.00} Summary of actions taken : In XX/XX/XXXX, I applied for mortgage refinance with originator Option One Mortgage. Please note the following changes as it pertains to Option One Mortgage : On XX/XX/XXXX Ocwen acquired and became successor in interest to Homeward Residential, the successor of Mortgage originator Option One Mortgage. As a result of this acquisition Ocwen Financial Corporation is a successor XXXX and is liable for the illegal practices alleged in this complaint. 

The application for mortgage refinance submitted was approved under the representation of what was described by the mortgage originator and understood by me as a typical Adjustable Rate Mortgage ( ARM ) product. This emphasis of an ARM was conveyed through a summary document presented. During the mortgage closing procedure, details were revealed that the ARM product being offered contains features that would base the interest rate on the XXXX Market Interbank Offered Rates ( LIBOR ) with the primary focus placed on this particular disclosure in addition to a 5-Year, fixed rate, Interest Only period with pre-payment penalties up to two years after origination. These product features were not discussed nor mentioned prior to the actual closing appointment. With the understanding of key terms as presented by representatives at closing, I concurrently performed a best case review attempt of ALL documentation prior to placing signatures on any items considering the expeditious fashion in which the closing was conducted and the wealth of information contained in the loan package. Beyond the 5-year, fixed rate, Interest Only period and in the years following the start of the current amortization period, I became extremely concerned that although a tremendous downturn was experienced in the LIBOR index due to mortgage market adversity, the interest rate on the ARM was never adjusted to reflect those changes in any way when this should have been the case based on market performance as indicated in various rates tables. The Product disclosure document specifically states that the interest rate will be based on the aforementioned index. A copy of the Adjustable Rate Mortgage Loan Disclosure is attached. I was able to contend through careful and independent examination of loan documents, specifically the ARM product disclosure, that deceptive practices were evident by the mortgage lender providing misleading information and through inadequate disclosure of the actual loan terms and conditions as well as leveraging contradictory language contained in several loan documents. Due to the complex nature of the misleading documents presented and the length of time transpired which the LIBOR index data was made clear, the harm resulting from these deceptive practices of the mortgage company was fully recognized by me in recent years. 

To resolve this I sought redress through a personal lawsuit filed in Federal Court charging the mortgage company with FTC Act section 5 violation but the case was  dismissed due to no private right of action. As the government agency that is equipped with enforcement to address such violations I am submitting this complaint to the CFPB to investigate further.