Consumer complaint received 2021-05-27
Product: Mortgage — FHA mortgage
Issue: Trouble during payment process — 
Company: LAKEVIEW LOAN SERVICING, LLC (AR)

I began researching ways to end the periodic/monthly Mortgage Insurance Premium ( MIP ) on my loan after 9 years of on time payments with extra going to principal. I found a list of requirements that must be met and realized I had met ALL of them well over 2 years earlier. I contacted Lakeview Loan Servicing through their system XX/XX/XXXX and requested for the MIP to stop since my FHA mortgage loan originated in XXXX, I had made payments for over 5 years, all payments on time, had over 22 % equity in home, and the Loan to Value ( LTV ) was well below the 78 % threshold. I have made additional principle payments every billing cycle which helped achieve the LTV ratio and equity limits earlier than projected by the amortization schedule. They responded XX/XX/XXXX that the MIP is longer required and is being cancelled according to FHA 's policies and requirements. This was great news, but when I started crunching numbers I found that it should have been cancelled 3 years earlier and that I have over paid around {$3000.00} in MIP! Neither Lakeview or FHA had notified me of my LTV during the life of this loan. So I sent a message XX/XX/XXXX asking about getting a refund. XX/XX/XXXX Lakeview responded with contact customer support ( which is what I already did ). I wrote a letter to Lakeview XX/XX/XXXX and mailed it. Received a letter from Lakeview XX/XX/XXXX saying they received it and are investigating. XX/XX/XXXX Received letter from Lakeview stating " if your loan reaches 78 % Loan-to-value prior to the auto-termination date, then the customer must request early MIP termination ... Regrettably, FHA guidelines do not provide for retroactive refunds. '' This blows my mind that neither the Loan company or HUD FHA monitor, or refuse to notify borrows that the magical 78 % LTV has been reached early by paying additional principal each month!!! They are stealing money from probably thousands of people knowingly. I have spent countless hours on the phone with HUD/FHA now, and they say that I am not due a refund and to contact Lakeview - the circle blame game continues.

HUD Handbook 4000.1 III.A.1.k and HUD Handbook 4155.2.7.3.c As part of the Mortgagees annual disclosures to Borrowers, Mortgagees must notify Borrowers of their option to cancel the annual MIP in advance of the projected amortization date by borrower making additional payments of mortgage principal. 

HUD bases the cancellation of the annual MIP on the initial amortization schedule. In cases where Mortgage Payments have been accelerated or modified, HUD may base cancellation on the actual amortization of the Mortgage as provided to HUD by the The Mortgagee must process the MIP cancellation using the Monthly MIP cancellation function in FHAC.

servicing Mortgagee. 

For loans closed on or after XX/XX/XXXX, FHAs annual MIP is automatically cancelled under the conditions outlined in the table below. 

As part of the Mortgagees annual disclosures to Borrowers, Mortgagees must notify Borrowers of their option to cancel the annual MIP in advance of the projected amortization date by making additional payments of mortgage principal.