Consumer complaint received 2016-08-08
Product: Mortgage — FHA mortgage
Issue: Loan servicing, payments, escrow account — 
Company: MIDFIRST BANK (NY)

I have been enrolled in bi-weekly payments for the past 10 years and 9 months ; my mortgage payment is automatically deducted from my bank account and paid to my mortgage on the first of the month. The reason for enrolling in this program is so that each year I am making one full additional payment per year and paying down my mortgage quicker. I have never missed a single payment as my payments are automatically made each month, for the last 129 months. My lifelong credit score was excellent, generally remaining at a XXXX-XXXX. 

Midland Mortgage bought out my mortgage from XXXX and the trouble then began. Midland raised my mortgage payment ; it was approximately {$86.00} short each month from what was being deducted. But, as I have stated, every 30 days they automatically receive the next month 's payment as well as one full entire additional payment per year. This is where the very questionable practice of Midland Mortgage comes into play. Because the payment was short they would " hold my payment in a separate account '' until they received my next month 's payment, withdraw the missing amount from that next payment and then apply it to my mortgage. Over and over and over each month continuously creating a late payment they could classify as delinquent. No one ever once notified me of such a practice of retaining these funds and not applying them as received. Even more suspicious is the fact that they strategically wait to apply these funds until the payment is exactly at the point where they can report it as 30 days past due. They do n't apply the funds as they receive them, they create this highly suspicious secondary account without my knowledge to " hold '' these funds and they ironically choose to apply my payment only when it becomes a delinquency on my credit report. How is this a legal ethical practice on the part of Midland Mortgage? 

Furthermore, I did not realize what they were up to while destroying my credit until they had already given me approximately XXXX derogatory marks. I only saw this in my credit rating when I went to check my score in preparation for purchasing a new home and applying for a new mortgage. My formerly excellent score was then dropped to a XXXX due to the inaccurate delinquencies reported by Midland Mortgage which then took a snow ball effect and all of my credit lines slashed my available credit to the balance amounts. This has prevented me from purchasing a new home for the last several months. To my understanding, when an erroneous mark on your credit prevents you from doing something ( i.e. purchasing a new home ) that legally falls under defamation of character. If this can be considered defamation of character on the part of Midland Mortgage I will also be pursuing legal action if they continue to not remove these marks. 

I have corrected the deducted monthly payment amount to accurately pay the full payment each month, however Midland Mortgage is still reporting my account as delinquent to XXXX, prolonging the period of time that I am now waiting in order to purchase a new home and obtain a new mortgage. They are also continuing to strategically withhold the funds that they receive until a date that makes the payment late rather than applying these funds when they are actually received. 

I have been trying to have this situation resolved for the past several months and Midland Mortgage has done absolutely nothing to rectify this situation and they continue to engage in these highly questionable practices of withholding payments and creating lateness. I want these marks removed from my credit, and I want them to cease from continuing to report my account as incorrectly delinquent because it is preventing me from purchasing a new home. They have completely destroyed my lifelong excellent credit rating and I want it restored as soon as possible so that I can purchase a new home.