Consumer complaint received 2018-07-25
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — 
Company: Onity Group Inc. (CA)

To save their home from foreclosure, our client applied and was approved for the HAMP modification on XX/XX/XXXX ( a copy of the modification is attached to this letter ). The client initiated the mandatory HAMP Temporary Payment Plan ( TPP ) on XX/XX/XXXX. The TPP payment was for the amount of {$2300.00}. 

During the next three months the client continued to make his mortgage payments despite the modification not being finalized. On XX/XX/XXXX, the client signed the completed loan modification, which confirmed a modified principal, interest, taxes and insurance payment of {$2300.00}. 
The first payment for the modification was due XX/XX/XXXX. 

On or about XX/XX/XXXX, the client called OLS to make his modified mortgage payment. The OLS representative advised him that his mortgage payment was {$2500.00}. The client then advised the representative that the modification contract that was just signed was set at {$2300.00}. The OLS representative advised the client that the increase in the mortgage payment was due to a shortage in his escrow account. I note here that per HAMP guidelines any escrow shortage should have been calculated into the loan modification calculations. 

The client objected at the mortgage payment and request that OLS correct this error. During this conversation, the OLS representative advised that the client could either accept the payment as set or his loan or he could chose to not make the payment and become delinquent. The representative refused to initiate a correction to the payments as was required. 

Feeling that he had no choice but to make the mortgage payment, the client made the mortgage payment as he was advised by OLS. The client continued to attempt to resolve this issue with OLS without success. 

On XX/XX/XXXX, the client received a billing statement from OLS which confirmed that his mortgage payment would increase from {$2500.00} to {$2700.00}. This increase was again due to the continued escrow shortage caused by the modification error of XX/XX/XXXX. As previously stated the client has attempted to resolve this issue with OLS on numerous occasions without success. 

As detailed in the Making Home Affordable Handbook Home Affordable ( HAMP ) for servicers section 9.3.7.2 Escrow Advances : Servicers should capitalize any escrow advance that has been or will be paid to a third party before the modification effective date. If capitalization is prohibited by applicable law, the servicer should direct the borrower to repay the advance in accordance with investor guidelines, the underlying security instrument and all applicable laws, rules and regulations. Servicers may not have the borrower execute a note for any escrow advance. 

Further, section 9.3.7.3 Escrow Shortages states that, in the event the initial escrow analysis identifies an escrow shortage a deficiency in the escrow deposits needed to pay all future tax and insurance payments the servicer must take steps to eliminate the shortage. Any existing escrow shortage currently being paid by the borrower should be included in the borrowers monthly mortgage payment. 

In closing, it is clear that OLS acted incompetently in the servicing of my clients loan. Further, once OLS became aware of the servicing issue, and acknowledged its error, OLS again failed to fulfill their legal obligation as the servicer of the clients loan to correct this issue.