Consumer complaint received 2018-10-18
Product: Mortgage — VA mortgage
Issue: Trouble during payment process — 
Company: Freedom Mortgage Company (VA)

This is a qualified written request under Section 6 of the Real Estate Settlement Procedures Act ( RESPA ). You are required to acknowledge my request within 20 business days and must try to resolve the issue within 60 business days.

I write in response to the receipt of four letters that arrived in the mail today indicating my account is either in default or past due and this information has been reported to credit bureaus. I am spending way too much time entertaining your mismanagement and misappropriation of resources. This is time Ill never get back! Letter summarizations follow : Date Subject Summary Content XX/XX/XXXX Re : Loan Number XXXX Unable to contact in regards to past due mortgage XX/XX/XXXX Re : Loan Number XXXX Legal protections under SCRA XX/XX/XXXX Re :  Loan Number XXXX Payment 30 days past due and loan in default XX/XX/XXXX Re : Loan Number XXXX One payment overdue and information may have been reported to credit bureaus My payments have been automatically sent to Freedom Mortgage since they began servicing my loan. When I set automatic paymentsI dont worry about them! The loan servicing uses professionalism to communicate requirements in a timely fashion not three-fourths of the way through the CY. If the payment amount I remitted did not change beginning XX/XX/XXXX, this would cause the loan servicing organization to reach out to contact menot by merely creating monthly statements. After all, you are responsible by law. A reasonable and professional manner to determine whether the customer is receiving the information is to use the contact information provided in the loan. The first contact by Freedom Mortgage, other than monthly statements, was the XX/XX/XXXX letter, received XX/XX/XXXX. 

My original loan payment, provided in my Closing Disclosure, was {$3300.00} as follows : {$2700.00} to P & I with {$610.00} of the payment going to escrow for property taxes and homeowners insurance. I established an automatic payment of {$3400.00} to account for any potential increase in insurance or property taxes. Accordingly, the delta ( {$17.00} ) would be credited to principle. If appropriately managed and administered, this amount would suffice for an escrow requirement of up to {$7400.00}. 

Escrow requirements for XX/XX/XXXX and XX/XX/XXXX were {$7400.00} and {$7200.00}, respectively. The {$3400.00} payment would have aptly handled the escrow if properly managed and administered by Freedom Mortgage. Parenthetically, Freedom Mortgage escrow analysis for CY XX/XX/XXXX caused an escrow rebate of {$310.00} in XX/XX/XXXX. The amount contributed to escrow should have been reduced and the residual used to curtail the loan. Rhetorically, why is the amount required for escrow in XX/XX/XXXX less than the amount required in XX/XX/XXXX when the requirements for XX/XX/XXXX are less than XX/XX/XXXX? Could this be mismanagement, misinformation, reprehensible, irresponsible, or all the above? 

It appears very odd, I received an escrow rebate check in excess of {$300.00}, but my payments are unapplied due to an escrow shortage of {$290.00}. This does not appear, from my perspective, that Freedom Mortgage has the ability to properly manage or is mismanaging my account. 

According to my account mortgage statements from Freedom Mortgages website, XX/XX/XXXX, my payment was {$3300.00} as follows : Principal : {$1000.00}, Interest : {$1600.00}, Escrow/Impound ( for Taxes and/or Insurance ) : {$600.00}, Regular Monthly Payment : {$3300.00}. As such, there was {$35.00} going to curtail the loan. As of XX/XX/XXXX, the payment was increased to {$3400.00}. The same statement indicated the escrow balance was {$2100.00}. You should have adjusted the escrow amount in XX/XX/XXXX and understood the requirements for XX/XX/XXXX. 

Had Freedom Mortgage been performing responsible account administration and servicing as required by law, the escrow account disclosure statement completed on XX/XX/XXXX would have been accurate. Therein, Part 3 Expected Escrow payment Over the next 12 Months was grossly inaccurate. Neither management nor your analysts have any business calling themselves what they claim to be. A sixth-grade education could have the correct numbers for escrow determination. This misinformation and negligence led to the debacle that currently exists THIS IS A DIRECT-ACTION CAUSE! 

Your XX/XX/XXXX statement of my account reflects : Interest : {$1600.00}, Principle : {$1100.00}, and Escrow : {$630.00}. These values total {$3400.00}. This is the amount submitted for payment and applied. You received a payment of {$3400.00} on XX/XX/XXXX. By Law, you are required to apply payment or return it. Whether you elect to apply it or not, statute requires you to credit the amount upon receipt. You are in direct violation of statute! You did not generate a statement on XX/XX/XXXX, yet elected to send a falsified credit report to the credit reporting agencies indicating my account was 31-60 days  overdue. 

Firstly, it is not only unprofessional, but criminal to state you have not received my payments. I have proof the payments are sent and received by Freedom Mortgage. This information was acknowledged by your Customer Care/Servicing Specialist. Secondly, if you are not going to apply the payment, then send the payment back to my bank or myself! It is unlawful to hold and not apply payments ( 15 USC Chapter 41 Subchapter I Part B 1639 ). You are bound by the Truth on Lending and Fair Credit Reporting Acts. Furthermore, you may not suspend a payment or wrongly misreport. 

We have never had any issue until your XX/XX/XXXX letter which I received XX/XX/XXXX. Your letter was crafted to indicate my payment was not sent and you inappropriately assessed a late fee ( {$130.00} ). I queried my bank on XX/XX/XXXX and they confirmed payment was sent and received by Freedom Mortgage in the amount for {$3400.00}. However, Freedom Mortgage elected to not apply the payment received. This is a direct violation of Dodd-Frank Act ( enacted 2010 ). By Law, late fees are not allowed to be greater than 4 % of the payment amount. Your escrow analysis indicated a requirement of {$3400.00} due to improper escrow analysis. My payment of {$3400.00}, albeit more than sufficient, leaves a residual {$7.00}. IF APPROPRIATE, the late fee would have been {$0.00} vice {$130.00}. This is a whopping 45,433 % unjustified and unlawful fee. Quite sure the Federal Reserve Board would be interested in this figure. 

As a mortgage servicer, by law, you are responsible for collecting and processing mortgage payments. You have delayed processing my payment resulting in unwarranted late fees, unjustified claims of default, and fraudulently reporting credit information. The Federal Reserve Board requires mortgage servicers to credit payments to consumers accounts as of the date of receipt.

My credit report has now taken at least a 100-point hit due to your unethical conduct! Your conduct is reprehensible and irresponsible. You then generated a statement on XX/XX/XXXX indicating the payment of XX/XX/XXXX was unapplied and the next payment on XX/XX/XXXX was to be {$6900.00}. Neither the math nor the unethical approach works here! 

You gave no information concerning my XX/XX/XXXX payment. I assume the payment remains with Freedom Mortgage and is unapplied. You did not generate a XX/XX/XXXX statement to acknowledge receipt or apply my {$3400.00} payment. You have misapplied, mismanaged, and used an unethical approach to secure additional capital from my personal resources. 

Even when I contact you, XXXX, XXXX, the Customer Care specialist specified Freedom Mortgage needed escrows ; indicating this was a RESPA requirement, were due to property taxes of {$3000.00} and homeowners insurance of {$1300.00}. She also indicated that our conversation was being recorded I would like to have a copy of this recorded conversation. If this situation does not get remedied to my satisfaction, youll be subpoenaed for it. This is false information. Im not sure if it is due to a clerical error or misinformation by design. 

Additionally, XXXX indicated the current {$3400.00} automatic payment would satisfy the payment if I submitted the RESPA required amount of {$290.00}. She gave me a confirmation number for the applied payment. I asked to speak to a supervisor to remove an erroneous charge of {$130.00}. The supervisor agreed and assured me the charge would be removed and my account was in good standing. Yet, as of today, I continue to receive this abomination. 

Escrows change due to changes in property tax and homeowners insurance requirements. I called the contact information phone number listed on the mortgage statement at XXXX on XXXX. Your automated telephonic account information indicates my account is current and the XX/XX/XXXX payment is {$3300.00} ( I took the liberty of recording the call ). This has been the same payment information since the beginning of the year. Is this information true and correct? When I call, your automated response system indicates I am current and payment is less than what you state in written correspondence. Which information is true? 

The customer relies on information provided by your organization to be credible, plausible, trustworthy, and factual. Imagine the surprise and consternation when you receive letters in the mail indicating the information provided from Freedom Mortgage, when called, is not the same. Is this Freedom Mortgages policy to confuse, bewilder, or deceive the consumer? 

Since you are collecting escrow, you are responsible by law for both the insurance and property tax payments. You are also responsible to know the amounts for the year. The property tax is public record, so there are no surprises with respect to that information. 

The XX/XX/XXXX assessed value of my property is {$710000.00}. The effective tax rate is {$0.00} per {$100.00} of assessed value. This yields an annual property tax of {$5900.00}. This is paid in two equal installments not later than the XX/XX/XXXX and XX/XX/XXXXof each year. This information should have been input into the escrow analysis performed by Freedom Mortgage.

Freedom Mortgage failed their responsibility to know the property tax value and amount for XX/XX/XXXX ( {$2900.00} -- XX/XX/XXXX/XX/XX/XXXX ). Freedom Mortgage merely guessed or hoped the property tax would be the same as the previous year ( {$3000.00} -- XX/XX/XXXX/XX/XX/XXXX ). Likewise, the homeowners insurance policy requirement was {$1200.00}. Freedom Mortgage would have known because they are lawfully responsible for the payment. I submit the neither guessing or hope is a method to ensure and administer to your responsibility. 

With this well-known and publicize information, the following correct escrow analysis table is what should have been provided by Freedom Mortgage on XX/XX/XXXX. 


AN XXXX ESCROW ANALYSIS EXTRACT GOES HERE! 



The loan overview tab on your website indicates you acknowledged and applied a county tax payment of {$2900.00} and an insurance payment of {$1200.00} in XX/XX/XXXX and on XX/XX/XXXX, respectively. XX/XX/XXXX is the very same day you insisted on an escrow cushion of {$1200.00}, to wit, I remitted a payment of {$290.00}. We both know this was disinformation because your website clearly indicates both amounts were known prior to our conversation on XX/XX/XXXX.

IAW the above escrow analysis I competed, if Freedom Mortgage would have taken care of their legal responsibility, at no time during the year, would the escrow balance have fallen below the two-month desired cushion of {$1200.00}. The total escrow requirement for the  XXXX is {$7200.00} yielding a monthly requirement of {$600.00}. The lowest balance during XXXX could have been {$1200.00}. Freedom Mortgages two-month optional desired buffer of {$1200.00} would NEVER BEEN BROACHED! The lowest balance during XXXX would have been $ XXXXAnd my {$3400.00} payment would have accomplished this! 

If Freedom Mortgage can not properly manage or be responsible for escrow, then I request escrow elimination. I have just demonstrated the knowledge and payment history to be responsible for property tax and homeowners insurance premiums. 

I spoke with another Customer Care Specialist at XXXX. XXXX ID # : XXXX, indicated my loan was current and payment due on XX/XX/XXXX was {$3500.00}. I informed her that Freedom Mortgage had already reported late payment on my credit report. This information was reported on XX/XX/XXXX two days after I was assured by a member of Freedom Mortgage management that my account was in good standing. This is highly unethical, unprofessional, and unwarranted. 

The actions taken by Freedom Mortgage with respect to unapplied payments are appalling, unprofessional, and criminal. Your letters indicate this information may have been reported to the credit bureaus. In fact, as of the date of the letters, specifically XX/XX/XXXX letter, the information had already been fraudulently reported to the credit bureaus as of XX/XX/XXXX. 

Consequently, each day this situation persists and is unattended, I assess a charge of {$1000.00} for harassment. I also charge {$500.00} per hour for research and reporting work. I have spent well over 14 hours on this research report. You are now assessed a fee of  {$7000.00} for this letter and {$2000.00} for harassment ( XX/XX/XXXX-XX/XX/XXXX ). Payment needs to be remitted to me at the above address. Payment is Due Not Later Than XX/XX/XXXX. A {$50.00} fee is assessed each day the payment is late. 

This situation and these harassing letters MUST STOP! They are completely UNTRUE, INACCURATE, UNFOUNDED and UNGROUNDED! You are now put on NOTICE. If these letters and the course Freedom Mortgage is pursuing do not stop immediately, I will file complaint in Civil Court. I am filing a complaint with the XXXX XXXX XXXX, Consumer Protection Agency, and the Attorney Generals Office, regardless. This unethical behavior MUST CEASE and DESIST! 

Your organization has already been charged for Fraudulent Misrepresentation. The list of criminal organizations is long and disreputable. These are certainly Unfair Business Practices. Where is your sense of decency and public trust? Your organization has already publicly settled for $ XXXX, let alone what has not been publicly disclosed. 

The Real Estate Settlement Procedures Act ( RESPA ) statute ( PL 93-533 ) was passed and enacted by the 93rd Congress in XX/XX/XXXX,  specifically XX/XX/XXXX ; and codified as Title 12, Chapter 27 United States Code, 12 U.S.C. 26012617. RESPA does not require  borrowers to maintain an escrow accountthis is a lenders choice. HUD regulates the maximum amount a lender can require a borrower to maintain in an account. 

RESPA has two main purposes : ( 1 ) Mandate certain disclosures in connection with the real estate settlement process so home purchasers can make informed decisions regarding their real estate transactions ; and ( 2 ) Prohibits certain unlawful practices by real estate settlement providers, lenders, etc. RESPA regulates the use of escrow accounts such as prohibiting loan servicers to demand excessively large escrow accounts. By law you are limited to a maximum of a two-month cushion.

Furthermore, RESPA statute and regulations DO NOT require lenders to maintain a cushion. Since XX/XX/XXXX, the RESPA statute has allowed lenders to maintain a cushion equal to one-sixth of the total amount of items paid out of the account, or approximately two months of escrow payments. If state law or mortgage documents allow for a lesser amount, the lesser amount prevails. Section 10 of RESPA limits the amount of money a lender may require the borrower to hold in an escrow. 

Recent regulations require lenders to reduce the cushion in accounts. Unfortunately, to avoid customer disapproval or dissatisfaction, lenders have been giving their customers the impression that HUD regulations require them to make this increase. The information XXXX gave to secure the {$290.00} on behalf of Freedom Mortgage is FALSE and fraudulent. The lender, not HUD, desired the cushion. This is Freedom Mortgages choice, NOT A STATUTORY REQUIREMENT as indicated by Freedom Mortgage on XX/XX/XXXX.

The recent appalling behavior of Freedom Mortgage to not apply automatic payments is unprofessional and criminal. There were sufficient funds in escrow to make hazard insurance and property tax payments. There was NO SHORTAGE! I firmly believe this is a fraudulent attempt to have me restructure my loan to increase lender profits! 

In accordance with Section 6 of RESPA, this is a " qualified written request '' concerning the servicing of my loan account. As such, Freedom Mortgage must acknowledge my complaint within 20 business days and must resolve the complaint within 60 business days by correcting the account or giving a statement of the reasons for its position. If I do not hear from you within this timeframe, I will file a complaint with HUD. 

This is not my error nor did I create this situation Freedom Mortgage did. It is now Freedom Mortgages responsibility to ensure it is corrected and resolved to my satisfaction. To wit, you need to absolve this situation and make it perfectly clear that : My account is current My account has never been past due My account has never been in default, ALL letters are due to a clerical / administrative error acknowledged and corrected by Freedom Mortgage No adverse actions have been taken or reported by Freedom Mortgage Freedom Mortgage needs to remove the fraudulent reporting to all credit reporting agencies My credit report pulled from ALL Credit Reporting Bureaus ( XXXX, XXXX XXXX, XXXX, XXXX, etc. ) to validate no Adverse, Late or Derogatory reporting information I professionally and wholeheartedly request your assistance in this matter as I believe I have exhausted all manners in which to correct this abomination. If I do not receive a letter and the reports indicating the above information, I will file suit against Freedom Mortgage. As such I am filing a grievance for unfair business practices. 

Thank you for your service, professionalism, and assistance. I anxiously await your assistance and response. 

Consternatedly Submitted, /S/ XXXX XXXX XXXX, XXXX XXXX XXXX United States XXXX ( XXXX )