Consumer complaint received 2018-12-26
Product: Mortgage — FHA mortgage
Issue: Trouble during payment process — 
Company: Freedom Mortgage Company (MD)

My husband and I closed on our primary residence mortgage loan on XX/XX/XXXX with XXXX XXXX. We purchased the home for the sale price of {$550000.00}. After putting a downpayment, the loan amount was {$440000.00}. The property was appraised prior to the closing for the amount of {$490000.00}. At the time of the closing, we were in the process of selling our prior primary residence. Once we sold it, we intended to put the proceeds on the principal balance of our new loan and expected that doing so would eliminate the private mortgage insurance ( PMI ) included in the loan. In fact, we were sure to ask about this at the closing table and were told that it would not be a problem to do so once we met the loan to value requirements. Shortly after closing, we received notice that the loan had been re-sold to Freedom Mortgage and the company would become our new loan servicer. 

We sold our other home in the summer of XXXX. Sometime thereafter I contacted Freedom Mortgage 's customer service line to request information regarding how to eliminate the PMI. Freedom 's customer service representative told me at the time that it was not possible to eliminate the PMI even once I met the Loan to Value ( LTV ) requirements because our loan was subject to a " seasoning requirement '' ( a period of time in which I could not eliminate the PMI even if we met the LTV requirements ). Even though this did not sound right based on the terms in my original loan documents and the little I knew about the federal Homeowner Protection Act which is cited in our loan documents, I decided to wait to further pursue this matter with Freedom until we received the proceeds from our other home and used these proceeds to reduce the principal balance ( i.e., until we met the LTV requirements ). After significantly reducing the principal balance in XX/XX/XXXX with the proceeds from the sale of our other residence ( as a result, our current loan balance is {$130000.00} ) I again contacted Freedom and was told once again that while I could make the written request, the likelihood was I was not eligible to eliminate the PMI. Please note, in addition to LTV amounts, we meet the other requirements ( we are current on our payments, etc. ) On XX/XX/XXXX I submitted the written request to eliminate the PMI ( see attached XX/XX/XXXX Letter to Freedom - I also cc : d on the email an individual I thought might be Freedom 's Compliance Officer from a Linked In Profile I obtained ). In response to the request, we received a letter from Freedom dated XX/XX/XXXX which informed us that the PMI could only be terminated if : ( 1 ) we obtained an appraisal from their vendor XXXX - the amount of the appraisal I learned by contacting the vendor is {$450.00} ) ; and ( 2 ) the " new appraisal demonstrates a Loan-to-Current-Value ratio of 75 % or less for loans aged less than two years and the appraisal indicates significant improvements to the property. '' See attached XX/XX/XXXX letter from Freedom. 

On XX/XX/XXXX, I contacted Freedom 's customer service again to discuss their letter and to express my concerns that these conditions were improper based on the terms of my loan agreement and federal law. I was told by the representative that I have a XXXX XXXX loan and that Freedom had to follow specific XXXX XXXX requirements as reflected in their XX/XX/XXXX letter in response to my request to terminate the PMI. The customer representative also noted that my records showed that I was not eligible to terminate PMI before XX/XX/XXXX although she could not explain why this PMI termination date was chosen. She also stated that there was a " flag '' on my account that indicated that I was eligible for refinancing and that was the only other way to eliminate the PMI at this time and offered to immediately connect me with someone to discuss refinancing ( I declined her offer ). When I asked her for the name of Freedom 's Chief Compliance Officer, she would not provide that person 's name. 

This is my third mortgage loan in my lifetime and I have never had any difficulties reducing PMI once I met the LTV requirements. I believe that Freedom 's actions in response to our request of requiring a {$450.00} appraisal for a loan at that time was less than one year old and in addition requiring that the appraisal must demonstrate that significant improvements were made to the property ( not likely for most consumers ) in order to eliminate PMI violate federal law and the terms of my original loan. I have made numerous attempts with Freedom to resolve this matter. Instead, I received repeated responses that seemed designed to discourage the consumer from making the request and when we did make the request, placing insurmountable and/or seemingly illegal barriers in order to keep the PMI in place despite our best efforts to explain that we do not believe they are permitted to impose these additional requirements ( please note that I have no basis for this assertion but I did wonder throughout this process whether Freedom has some sort of a kickback of other improper arrangement with the PMI insurer which provides incentives to impose these kinds of obstacles to discourage a consumer from further pursuing this matter ). Therefore, I am requesting the Bureau 's assistance in evaluating whether Freedom is acting in violation of applicable law in this instance and if so, in properly resolving this matter ( i.e., terminating the PMI as we requested ).