Consumer complaint received 2015-08-27
Product: Mortgage — Conventional fixed mortgage
Issue: Loan servicing, payments, escrow account — 
Company: Seterus, Inc. (IL)

I originated a 20yr fixed mortgage on XXXX with XXXX Bank and at closing, I received a Federal Private Mortgage Disclosure for Residential Loans. XXXX See Attached XXXX This showed that the " Original Value '' of the property was $ XXXX at that time. The document also shows that paying PMI was supposed to be " Automatically Terminated '' on XXXX. At this point, the principle reached 78 % of the " Original Value '' of the property. The payments were $ XXXX/month. I confirmed that the loan is a XXXX backed loan. 




XX/XX/XXXX I obtained a loan modification with XXXX XXXX XXXX, the new servicer of the loan, through the Home Affordable Modification Program, HAMP. ( Also see attached ) The principle balance, interest rates, and the maturity date changed by the agreement. This would of course change an amortization schedule, I realize that. During the modification process, there was no appraisal done on the home nor was I ever notified that the " Original Value '' of the home was to change from the original loan conditions. I received no disclosures of any kind nor was I notified of a new PMI " Automatic Termination '' date. The servicing of the loan had been taken over by Seterus XXXX Inc. shortly after the modification. I noted that interestingly, the $ XXXX/month payment stayed the same and noted that the modification was never recorded into XXXX XXXX records. If my PMI was adjusted to reflect the new loan conditions, why would the payment still be identical? 




Recently, I have been attempting to refinance my mortgage with XXXX XXXX as I qualify for the HARP Program. They tell me that since I am currently paying PMI, it would be a requirement of the new loan but based off of the rent market conditions. Essentially, I would have to again pay PMI for the next who-knows-when. This has caused me to contact Seterus and inquire about my PMI and find a of my paperwork. This is when I discovered a potential problem in what I was told vs. given in writing. When I have not been getting hung up on, Seterus has been interesting to work with to say the least. I keep getting different answers from everyone I speak with and the last was a supervisor. He told me that the only way for me to drop PMI was to send in a request and {$350.00} for an appraisal. I know my loan is currently nowhere near 80 % LTV under current market conditions but it is well under that based off of the last appraised " Original Value. '' I asked for him to provide me with an actual date for " Automatic Termination '' and he told me that there is not one. The only way to drop it is by me initiating a " Cancellation. " It is interesting to note that the Consumer Financial Protection Bureau released a bulletin dated just earlier this month warning loan servicers of violations of the Homeowner Protection Act. ( Attached ) When I called them and explained my issue, they told me to definitely file a complaint. 




My contentions are this : A ) I was never notified of any change of conditions of my PMI and as a matter of fact, the payments actually stayed the same even though the loan amounts and terms changed. 




B XXXX The Modification Agreement specifically states on page XXXX ( F ) that unless the terms are " Expressly modified by this agreement ), the initial load documents remain in effect. 




C XXXX The reply to my inquires to Seterus appear to be in violation of the Homeowners Protection Act by not only not disclosing PMI terms, but also appears that the PMI terms were never re-calculated to reflect the modification. XXXX See attached document HPA.pdf page XXXX ( D ) )