Consumer complaint received 2022-04-22
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — 
Company: Mr. Cooper Group Inc. (FL)

This complaint is about a complication that results when a mortgage company " sells '' the servicing of your loan to another servicer. I have unfortunately been through this process several times over the years. Recently, in early XXXX, I purchased a new home and my mortgage was serviced by XXXX XXXX XXXX. I did not start escrow because my tax and insurance for the year were paid at closing. What I didn't fully understand at the time is that escrow covers future tax and insurance payments, and that I would have to make the full year 's tax/insurance payment at once if I had not been paying into escrow for the previous year. 

I spoke to XXXX XXXX XXXX about this when my county sent me my property tax bill due at the end of XXXX, XXXX. XXXX XXXX said that there is a " catch up '' option, where I can initialize escrow to cover the tax payment that is currently due, spreading the tax payment over the next 12 months, and future tax payments. Obviously this means you are paying double into escrow for 12 months, but I was fine with that because I made a mistake, and paying it over the course of the next 12 months was a much preferable option than to having pay my taxes and insurance all at once. 

Several days after I applied to initiate escrow payments with XXXX XXXX XXXX ( including the catch up option ), I got a letter from them that the servicing of my loan is in the process of being transferred to Mr Cooper. Approximate date of this letter was XX/XX/XXXX. I spoke to XXXX XXXXXXXX XXXX XXXXXXXX escrow department several times, trying to complete this escrow initialization before the transfer completed, as my taxes were due between XX/XX/XXXX and XX/XX/XXXX, with the amount of taxes you have to pay increasing the later you pay them. And my homeowners insurance renewal was due mid XX/XX/XXXX. Ultimately, the response that I got from XXXX XXXX XXXX is that the servicing of my loan is being transferred, they don't have enough time to initiate my escrow before the transfer date, I will have to initialize escrow with Mr Cooper once the service transfer is complete. 

I had no choice but to wait until my loan was transferred to Mr Cooper. I called them on day 1 of them owning my loan, XX/XX/XXXX. I was told that it is to early, they don't even have the details of my loan sent over yet. The transfer was supposed to be completed by XX/XX/XXXX ( approximately ). 

I called them on XX/XX/XXXX. Several more days of delays. Finally I speak to them and they have my loan details, this is with approximately 1 week before my insurance premium is due. Between being on hold, getting routed to the right representative, and finally speaking to the right person, I am on the phone for roughly 5 hours ( apparently they take over servicing a lot of loans as of the 1st of the year ). The escrow representative tells me that they have to wait 60 days from the date they assume the servicing of my loan before they can initialize escrow, because they have yet to receive full details from my previous servicer. 

I tried to argue them. I tried to say that I've been trying to initialize escrow since XX/XX/XXXX, about 45 days ago. And although the representatives were empathetic, ultimately it was out of their hands. I had no choice but to pay my insurance premium in full. 

The representative told me to call on XX/XX/XXXX to initiate escrow for my property taxes. This was the first available date to establish escrow due to their 60 day waiting period. It can take up to 30 days for them to initiate escrow. My property taxes were due XX/XX/XXXX. So I had 0 days of room for error. 

Although it took many phone calls, escrow was initiated in time to cover my property taxes, and they were paid through escrow. However, because they were paid at the very end of the timeline, my property taxes were about {$500.00} higher than if escrow had been initiated when I originally called in to do so. 

The basis of my complaint is this : The transfer of the servicing of my loan negatively affected my ability to initiate escrow. Had my loan never been transferred, I would have been able to have escrow cover my insurance premium, and my property taxes would have been paid at the rate of about {$500.00} lower. Because the loan servicing was transferred, the new servicer has built in delays to initiate escrow, which did not allow me to do so. I did not ask for my loan servicing to be switched. But I suffered the consequences. 

I do not think this problem is unique to this situation. This is a problem, or potential problem, when all loans are transferred to a new servicer. When I initially called in to initiate escrow, there was plenty of time for them to complete all the necessary actions to pay my property taxes at the lower rate, and to cover my insurance premium. In this case, because my loan was transferred right in the middle of my request, there was not enough time for either servicer to initiate escrow, and I had to cover the homeowners insurance premium in full and pay the higher property tax rate. Consumers dont ask to have their loans transferred, and Ive had mine transferred twice in the same year before. Its supposed to be seamless for the consumer. However, as I have shown above, it is not. I do believe that a change needs to be made, not just for this situation, but across the industry for when a loan is sold to another servicer.