Consumer complaint received 2018-04-19
Product: Mortgage — VA mortgage
Issue: Trouble during payment process — 
Company: PHH Mortgage Services Corporation (MD)

I need a CFPB investigator to get involved in this as soon as possible. PHH is not in compliance with the Real Estate Settlement Procedure Act ( RESPA ), 12 CFR 1024.17, or their own frequently asked questions ( FAQ ) that they send out. They refuse to look into this and just claim, falsely that they are in compliance, even though all facts show that they are not. 


I have attached a copy of the most recent FAQ that they sent out. It is in compliance with the federal regulations, but PHH is not even following their own documentation in this matter. I can not be the only homeowner affected by this. 


Per the PHH FAQ : We list all possible disbursements or expenses such as property taxes or insurance premiums to be paid on your behalf for the next 12 months. We take the total and divide the amount by 12 payments. Total anticipated disbursements divided by 12 payments equals the Monthly Escrow Payment. PHH knows, and has never denied that I have paid my XX/XX/XXXX real-estate taxes. The anticipated disbursements, as shown on the PHH escrow analysis are {$1800.00}. XXXX = {$150.00} and not the {$420.00} that PHH is charging me each month. 


On XX/XX/XXXX, I informed PHH that I paid my taxes in the amount of {$3300.00} for the year XX/XX/XXXX. I was instructed to fax in proof of the payment, which I did on XX/XX/XXXX, but due to a backlog of such requests PHH didnt mark it as received until XX/XX/XXXX. I did make several follow-ups and was told each time it was in process. 


PHH states in their response However, the Real Estate Settlement Procedure Act ( " RESPA '' ) requires the collection 1/12th of the total taxes and insurance billed. The total amount projected to be paid for taxes and insurance in XX/XX/XXXX is {$5100.00}, so {$420.00} is required to be collected each month according to the RESPA regulation and is unable to be altered if the bills are prepaid. 


This is not true for several reasons. First off, the projected amount to be paid in taxes and insurance in XX/XX/XXXX{$1800.00}, as shown on the PHH Escrow analysis the provided and that is attached. ( {$230.00} & {$140.00} for taxes in XX/XX/XXXX, {$1400.00} for insurance in XX/XX/XXXX ). PHH admits in their first response We then updated our system to reflect that the next county tax bill will be due in XX/XX/XXXX. They know there are no taxes, and nothing more than {$1800.00} due until XXXX of XXXX and they freely admit that. The second reason their response is not true is that per RESPA page 12 :  Shortages, Surpluses, and Deficiency Requirements12 CFR 1024.17 ( f ) The servicer shall conduct an annual escrow account analysis to determine whether a surplus, shortage, or deficiency exists as defined under 12 CFR 1024.17 ( b ). 


Per 12 CFR 1024.17 ( f ) C. 1. ii.Charges during the life of the escrow account. Throughout the life of an escrow account, the servicer may charge the borrower a monthly sum equal to one-twelfth ( 1/12 ) of the total annual escrow payments which the servicer reasonably anticipates paying from the account. In addition, the servicer may add an amount to maintain a cushion no greater than one-sixth ( 1/6 ) of the estimated total annual payments from the account. 


PHH does not reasonably anticipate paying taxes until XX/XX/XXXX as they freely admit. PHHs own FAQ on how escrow accounts are calculated says that they add together what they expect to pay within 12 months, and divide that by 12 to determine the monthly payment. That would be in accordance with RESPA and CFR guidelines, but in this case, they are including amounts they admit they know they wont be paying within 12 months. 


PHH even goes on to explain that I can submit for other off cycle analyses of my account to get the amount of overpayments refunded. This does not make sense to continue to overpay and then request refunds. Page 3 of the PHH escrow analysis clearly shows overpayment in XXXX of a total of {$3700.00}, with nothing due until XX/XX/XXXX. 


The CFR can be accessed at : https : //www.consumerfinance.govXXXX XXXX XXXX The RESPA guidance can be accessed at : https : //www.federalreserve.govXXXX and it is attached.