Consumer complaint received 2018-04-17
Product: Mortgage — Reverse mortgage
Issue: Trouble during payment process — 
Company: Mr. Cooper Group Inc. (VA)

This complaint is regarding the handling of the servicing for the Reverse mortgage on my mother 's home who is now deceased. I am one of the six ( 6 ) heirs but am also the individual that the now deceased HECM borrower gave permission to XXXX XXXX to discuss this account. 

After having repeatedly provided the intent to sell this property within the allotted time frame that is permitted [ up to six ( 6 ) months and if approved, two ( 2 ) ninety-day extensions ] XXXX XXXX continued to make contact via mail demanding documents and threatening legal action to include adding attorney fees and costs to the mortgage balance payoff when moved to the foreclosure process. 

As you will read in the timeline below, after our mother passed away, we contacted the servicing division within 17 days to inform them of her death and our intent. I was personally told that XXXX XXXX had no information as to the process that we needed to follow and that we needed to send a written notice of intent by XX/XX/XXXX along with supporting documentation to include a listing since our intent was to sell the property. After explaining that we were engaging a contractor first to assess the needed repairs in order to market the property to eligible buyers, the XXXX representative indicated that that was fine but we needed to send the listing as close to the XX/XX/XXXX date as possible. 

Then the threatening notices and visits began that included misleading information ( i.e., statements such as if the loan was not paid in full within 30 days from the date on the XX/XX/XXXX letter, that we were in breach and XXXX would immediately proceed to foreclosure and sale of the property ). 

After once again attempting to contact XXXX with a written notice both faxed and sent by certified mail, we continue to receive misleading and threatening letters along with physical visits to the property by XXXX XXXX representatives. 

We have engaged a contractor, obtained a fixed-price agreement to repair and renovate the property to prepare for sale, hired and met with an FHA Approved Appraiser that inspected the property on Monday, XX/XX/XXXX and upon receipt of said appraisal, intend to formally list the property. A copy of the listing will be provided once the appraisal is received and a list price is determined based on after-improved/repaired value. This has been the original intent that has been relayed repeatedly to XXXX XXXX since day one to no avail. 

Therefore, we are now requesting that the CFPB have this complaint on record and assist us with our complaint of Unfair, Deceptive and Abusive Acts and Practices that XXXX XXXX has engaged in with regard to the handling of our property disposition following the death of the HECM borrower. 

What follows below is a date-line of activity on this account since the beginning of the XX/XX/XXXX fiscal year. 

XX/XX/XXXX Faxed and mailed the Annual Occupancy Certificate to XXXX XXXX which gave permission to XXXX XXXX to discuss the mortgage account with daughter ( complainant ).

XX/XX/XXXX HECM borrower deceased.
XX/XX/XXXX Daughter ( complainant ) contacted XXXX XXXX at XXXX and spoke with a XXXX XXXX representative by the name of XXXX. Complainant informed XXXX of the passing of the HECM borrower and the XX/XX/XXXX date. Complainant asked the following questions and received the corresponding answers from XXXX : 1. What is the next step in the process to pay off the outstanding balance of the mortgage as the heirs wish to list and sell the property after making needed improvements such as a new roof ; update the kitchen and baths ; replace flooring ; etc.? 
Representative XXXX Response : You will need to send either a handwritten or typed, signed, and dated letter of intent describing what you plan to do with the property since you have indicated you will be listing the property for sale. Also, attach a copy of the death certificate and a copy of the listing. This notice must be received by XXXX XXXX no later than XX/XX/XXXX. Make sure to reference the XXXX XXXX Loan number and either fax to XXXX or mail to XXXX XXXX, XXXX. XXXX XXXX, XXXX, Texas XXXX. 
2. We wish to first complete the repairs and obtain an appraisal before listing the property for sale so can we send the letter of intent with the death certificate and clarify that the listing will follow? 
Representative XXXX Response : Yes, but you need to send a copy of the listing as close to the XX/XX/XXXX date as possible.

3. If after making the improvements and listing the property for sale but no sales contract has been obtained, how much time do we have before the HECM must be paid in full? 
Representative XXXX Response : You may request up to two ( 2 ) 90-day extensions but do not send any requests outside of the following date range : XX/XX/18 XX/XX/2018. You may also be required to send further documentation at that time to support the extension request. 
4. Is there any written documentation that you can send me that describes this process and the rights of the heirs? Also, are there any forms that should be used for the Letter of Intent that you would be able to send me? 
Representative XXXX Response : No, there is no written material that we have that can be sent and there are no documents. You just type or handwrite the Letter of Intent as previously described and send to either the fax or mailing address provided. 
XX/XX/XXXX Caregiver/Occupant of property and second daughter of the HECM borrower, contacted complainant and provided a copy of a notice that was taped to the front door of the property, XXXX XXXX XXXX, XXXX XXXX, VA, XXXX by a XXXX XXXX representative. Second daughter ( caretaker for several years along with occupying the property ) was told by the representative that this notice needed to be posted and he needed to take a photo of the notice. The notice is available upon request and includes the following text from the Reverse Mortgage Servicing Dept : URGENT PLEASE CONTACT OUR OFFICE XXXX. XXXX XXXX is a debt collector. This is an attempt to collect a debt and any information obtained will be used for that purpose. However, if you are currently in bankruptcy or have received a discharge in bankruptcy, this communication is not a demand for payment of the captioned debt to the extent that it is included in your bankruptcy or has been discharged, but is provided for informational purposes only. 
XX/XX/XXXX Second daughter/additional heir of the HECM borrower, contacted complainant/first daughter and provided a copy of a notice received in the mail at the property address that was addressed to The Estate of HECM borrower. The substance of the notice referred to specific guidelines mandated by the Department of Housing and Urban Development ( HUD ) as follows : The reverse mortgage is technically in default due to the death of the borrower..This letter is not intended as a payoff statement ; additional amounts may become due..Please contact our Reverse Mortgage Servicing Department at to obtain an accurate payoff amount. This default must be resolved by any of the following methods : A. The balance must be paid-in-full within thirty ( 30 ) days from the date of this letter. 
B. The mortgage will be released and no deficiency judgment filed if the property sells for the lesser of the debt, including shared appreciation, or 95 % of the appraised value with the proceeds made payable to XXXX XXXX, even if the debt is greater than the appraised value. Please contact us for more information if you are interested in this option and believe that the property value is less than the outstanding principal balance. 
C. If the debt is not paid-in-full, or the property is not sold within thirty ( 30 ) days from the date of this letter, we are required to initiate foreclosure proceedings. 
D. We are permitted to consider accepting a deed-in-lieu of foreclosure, as long as good marketable title can be conveyed. 

The Mortgagor or the Mortgagors estate may request an appraisal at his or her own expense if an estimate of the propertys current value is desired. If none of the actions above are taken in thirty ( 30 ) days, Foreclosure will be initiated by the Servicer within three ( 3 ) months, but not less than one ( 1 ) month.

Whichever option that you choose, HUD guidelines require that we obtain a full appraisal on the property. You may be receiving a phone call from our appraisal vendor in the coming weeks to attempt to schedule an appointment to visit the property.

If you fail to cure this breach within thirty ( 30 ) days for the date of this letter, we will proceed immediately with foreclosure and sale of the property.

A copy of the full notice is available for reference which also provides HUD-approved housing counseling agencies for assistance along with the phone number for the Reverse Mortgage Service Center. 
XX/XX/XXXX A certified letter ( copy available ) was mailed to XXXX XXXX and also faxed indicating the same intent as relayed to the XXXX XXXX representative via phone call on XX/XX/XXXX. 
XX/XX/XXXX A letter dated XX/XX/XXXX ( copy available ) was received from XXXX XXXX that indicates non-receipt of required documentation to support your request and that your request has not been approved. The notice further indicated that you have a limited amount of time to send the supporting documentation before we move the loan through Due and Payable and Foreclosure process. The notice gives a list of supporting documentation needed for which the only item that would apply to this specific situation is the item listed as If your intent is to sell the property provide a Real Estate Listing Agreement and/or Real Estate Sales Agreement. In bold print the notice included the following text : Be advised, if we do not receive the required documentation, we will move forward with the foreclosure process. All applicable attorney fees and costs will be included in any future payoff amount. 
XX/XX/XXXX A messenger from XXXX XXXX physically showed up at the property and required second daughter-occupant-heir to sign a prepared statement certifying that she is occupying the house. No copy of the statement was provided after signing. 

We wrote this same letter to XXXX XXXX with mail tracking for them to receive XX/XX/XXXX and have demanded that further threatening notices cease and desist along with any non-approved physical visits or inspections to the property. Also, that any further correspondence be addressed to the authorized contact on record, Complainant, at her residence ( address provided ) ( Phone provided ). 

We also demanded that XXXX XXXX  provide written confirmation that they will NOT be adding any fees related to any legal or foreclosure processes to the payoff of this mortgage as they have been given ample notice of the surviving heirs intent to repair, list, and sell this property in order to pay off the existing HECM note in full before distribution of any proceeds from the sale as long as payoff is completed prior to the required deadlines dictated for HECM mortgages ( within 6 months from the date of death barring any approved extensions following the initial 6 months but no more than 12 months from the date of death ).