Consumer complaint received 2019-09-08
Product: Mortgage — FHA mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage — 
Company: BANK OF AMERICA, NATIONAL ASSOCIATION (MA)

In XXXX, I began the process of a mortgage modification through the Making Home Affordable program. I completed all of the paperwork and continued to make payments as scheduled until XXXX of XXXX, when I was contacted by a Bank of America representative and was told not to pay or I would not be approved for a loan modification. I received monthly phone calls from the mortgage modification department and continued to skip or make payments as requested. At the end of XXXX, I had still not been approved for a modification and received a letter from Bank of America threatening foreclosure. I immediately contacted the bank for an explanation. I was told that I had declined their loan modification and since I had not made payments satisfactorily the previous year, Bank of America was going to begin the foreclosure process if I did not bring my account current. I explained that I had never received a loan modification agreement and therefore, had not declined said agreement. Someone from the mortgage modification department called me the next day and explained that my application had been lost and I needed to complete the paperwork again. I completed all of the paperwork again and was approved for a loan modification in XXXX, XXXX. I began trial payments in XXXX, XXXX. 
During a recent refinance of my mortgage through XXXX XXXX XXXX, it was discovered that there were discrepancies in the accounting methods of Bank of America during my Making Home Affordable loan modification in XXXX. In my modification, I was offered a reduced payment. This was achieved through a lower interest rate, extending the loan to 30 years and a no interest loan from HUD in the amount of {$20000.00}. I was told this amount would be taken off of my principal balance and held in a non-interest bearing account. The disbursement on the HUD loan has never been accounted for and {$34.00}, XXXX was held in a non-interest bearing account as unapplied funds from XXXX, XXXX until XXXX, XXXX. This included 14 months of payments of {$1300.00} from XXXX and XXXX totaling {$19000.00}. Once this amount is subtracted from the {$34.00}, XXXX, the remaining balance of {$1500.00} is unaccounted for. Loan statements from XX/XX/XXXX, show an outstanding balance of {$20000.00} necessary to bring my account current. In addition, Bank of America has not accounted for the HUD loan of {>= $1,000,000}. 
I contacted the loan modification department at Bank of America in XXXX of XXXX. I spoke to two different individuals who could not explain the accounting done by Bank of America. The first associate I spoke to said, I have never seen funds applied like this before. He then put me on hold to get his manager, who also could not explain the accounting or missing funds. I sent an email to XXXX XXXX, President of Consumer and Small Business at Bank of America. I received a response the next day. I had been assigned a point of contact, XXXX XXXX, in their mortgage department. In a letter dated XXXX, Bank of America representative, XXXX XXXX, explained this partial claim was due to 12 months of missed payments. However, I was not behind 12 months of payments, in addition, I was told by Bank of America in XXXX, not to make payments from XXXX, XXXX until XXXX, XXXX, or I would not be approved for the modification. The loan statement from XXXX of XXXX shows a new principal balance of {$190000.00}. This amount does not include the additional {$20000.00} from the HUD loan. The {$34000.00} of unapplied funds are gone and my principal balance had only decreased by {$430000.00}. Other than the 14 monthly payments I made, Bank of America has not adequately accounted for the money in the unapplied funds account or the {$20.00}, XXXX from HUD. During multiple phone conversations with XXXX XXXX of Bank of America in XXXX and XXXX of XXXX, she could only say the extra funds were used for fees and late payments.