Consumer complaint received 2016-04-26
Product: Mortgage — Conventional fixed mortgage
Issue: Loan modification,collection,foreclosure — 
Company: LoanCare, LLC (FL)

Our firm, XXXX XXXX, was hired by the Borrowers to investigate possible errors committed by their mortgage servicers, previously LoanCare and now XXXX XXXX XXXX. The Borrowers were approved for a loan modification XX/XX/XXXX that brought their payments down to {$1300.00}. The modification agreement stated all past due amounts including taxes, insurance, and any other fees past due, would be added to the unpaid principal balance. Less than 3 months later, the Borrowers were sent a notice informing them their monthly payment was increasing to {$1600.00} effective XX/XX/XXXX due to an escrow shortage. If the past due taxes and insurance were capitalized into the new principal balance amount as the modification agreement stated, there should not have been an escrow shortage and there should not have been that significant of an increase in their monthly payment. 
After receiving the notice of payment increase, the Borrowers contacted LoanCare several times over a short period of time to determine the precise amount of their escrow deficiency so that they could pay the amount and lower their payment back to what it was supposed to be according to the modification agreement. Each time they spoke to someone at LoanCare they were given a different figure amount that needed to be paid with no explanation as to why the amount was fluctuating. Due to their ongoing frustration, they hired our firm to investigate what they actually owed and why their payment had increased shortly after they modified their loan. 
We hired a forensic accountant to analyze the modification and the loan 's transaction history. In said analysis, it was determined LoanCare never capitalized any amounts other than past due interest into the post modification principal balance, which was the cause of the large escrow deficiency and improper payment increase. Moreover, the transaction history showed LoanCare did attempt to correct its error by posting a payment to the account that was then credited to the corporate advance and escrow balances in an attempt to bring the payment back to what it should have been. However, LoanCare failed to perform an updated escrow analysis after posting said credit/ payment and the account was still inaccurately showing the increased payment amount as due every month. Throughout this process, the client continued to make the modified payment amount each month, which was being placed into suspense each month and led to LoanCare charging excessive late fees monthly. 
Additionally, LoanCare finally performed another Escrow Analysis that found the Borrower 's escrow account actually contained a surplus however, they refused to disburse the funds due to the delinquency of the account, which was caused by their failure to properly process the modification and conduct an updated escrow analysis in the first place. The most recent escrow analysis conducted by LoanCare was dated XX/XX/XXXX and states the monthly mortgage payment for the last year was {$1300.00} however ; LoanCare was claiming the Borrowers owed {$1600.00} on the monthly mortgage statements. Then, conveniently the loan was transferred to a new servicer, XXXX XXXX XXXX, who is now attempting to claim the Borrowers owe several months of back payments for the inaccurate amount of {$1600.00}. When the issue was presented to XXXX, they claimed there was nothing that could be done because it was the past servicer 's records. And when LoanCare was notified of its errors, it claimed there was nothing that could be done since the servicing rights have been transferred to XXXX.