Consumer complaint received 2025-04-09 00:00:00
Product: Mortgage — FHA mortgage
Issue: Trouble during payment process — Payment process
Company: MIDFIRST BANK
State: PA

Complaint narrative:
Consumer Financial Protection Bureau XXXX XXXX XXXX XXXX XXXX XXXX Subject : Formal Complaint Regarding Misapplication of Funds, Improper Mortgage Servicing, and Failure to Provide Adequate Loss Mitigation Assistance by MidFirst Bank XXXX XXXX XXXX  To Whom It May Concern, I am writing to formally file a complaint against MidFirst Bank ( operating as XXXX XXXX  ) concerning multiple serious issues with the handling of my mortgage account. Despite my repeated efforts to resolve these matters directly with the institution, they have failed to provide a satisfactory resolution. Specifically, there are significant discrepancies in the application of funds towards my mortgage and a series of failures regarding loss mitigation assistance and foreclosure prevention procedures. These failures have raised serious concerns regarding potential violations of several consumer protection laws and regulations.

1. Misapplication of Funds and Failure to Properly Account for Payments I have discovered a significant discrepancy of at least {$3600.00} in unapplied funds that were paid towards my mortgage. Upon contacting XXXX XXXX, I was informed that my mortgage account reflects only {$400.00} of unapplied funds, with no explanation provided for the missing amount. This discrepancy has been ongoing for an extended period, and no attempt has been made by the bank to explain where this money has been allocated. 

This situation constitutes a violation of the Real Estate Settlement Procedures Act ( RESPA ) under 12 U.S.C. 2605 and 12 C.F.R. 1024.21, which mandates that mortgage servicers must accurately apply payments and maintain an adequate accounting system. Additionally, 24 C.F.R. 203.501 ( FHA Servicing Regulations ) also places a responsibility on the servicer to ensure all payments are correctly processed and properly reflected in the borrowers account.

2. Failure to Provide Accurate Information and Transparency I have repeatedly requested clarification on this discrepancy, but XXXX XXXX has failed to provide a timely and accurate explanation for the unapplied funds. In my communication with XXXX of their representatives, an agent named XXXX ( employee number XXXX ) confirmed that there should be at least {$3600.00} in unapplied funds, but no further action was taken to investigate or resolve this issue. 

This failure to provide accurate and timely information violates the requirements of RESPA, as outlined in 12 C.F.R. 1024.36. Furthermore, the lack of transparency in their responses raises serious concerns about the integrity of their accounting and financial practices, potentially constituting a breach of 12 U.S.C. 2605 ( e ).

3. Obstruction of Loss Mitigation Assistance and Foreclosure Prevention Over the last year, I have experienced substantial hardship, including becoming unemployed and subsequently enrolling in a mortgage assistance plan provided by XXXX XXXX. I followed all instructions and procedures, including submitting the required documentation. However, after securing new employment, I was told by XXXX XXXX  that I needed to submit a signed application for assistance to bring my loan current. Despite repeated attempts to submit this application, I was informed that I must first receive a rejection letter before proceeding with any further assistance.

This constitutes a failure to comply with loss mitigation procedures, specifically 12 C.F.R. 1024.41, which governs how servicers must respond to requests for assistance and prohibits dual tracking ( continuing foreclosure proceedings while a loss mitigation application is under review ). The repeated denial of assistance and requirement for a rejection letter is both unreasonable and detrimental to my ability to bring my loan current, suggesting a pattern of obstruction by XXXX XXXX, potentially leading to wrongful foreclosure actions.

4. Potential Fraudulent Practices and Failure to Provide Foreclosure Protection The combined failure to properly apply payments, provide clarity on unapplied funds, and assist with loss mitigation or foreclosure prevention has raised serious concerns regarding potential fraudulent activity or mismanagement. The actions or inactions of XXXX XXXX  may constitute violations of FHA Guidelines ( 24 C.F.R. 203.501 ), as well as possible violations under the Fair Debt Collection Practices Act ( FDCPA ) if the servicer is found to be engaging in unfair practices regarding payment applications or failure to follow lawful foreclosure procedures.

Request for Audit and Immediate Investigation Given the severe nature of these discrepancies and failures, I am requesting the following actions : 1. A full forensic audit of my mortgage account, including a detailed accounting of all payments and unapplied funds, starting from the date the loan was transferred to XXXX XXXX. 
2. A comprehensive review of XXXX XXXX compliance with RESPA, FHA servicing regulations, and applicable federal mortgage servicing laws.

3. A detailed explanation from XXXX XXXX  regarding where the {$3600.00} in unapplied funds has been allocated and why this amount has not been properly credited to my loan account.

4. Immediate action to correct any errors or discrepancies related to the application of my payments and ensure that all payments are properly applied to my mortgage.

5. An explanation of why my request for mortgage assistance has been repeatedly obstructed and the steps XXXX XXXX  is taking to bring my loan current in accordance with federal regulations. 

Conclusion The conduct of MidFirst Bank XXXX XXXX XXXX has caused significant distress and financial hardship, as well as a complete lack of transparency regarding the status of my mortgage account. I am demanding accountability for the improper handling of my payments, the failure to apply loss mitigation procedures, and the obstruction of foreclosure prevention assistance. I believe these actions constitute violations of multiple federal regulations, and I urge the Consumer Financial Protection Bureau to investigate this matter thoroughly and take immediate corrective action. 

Please do not hesitate to contact me should you require any additional information or documentation. 

Thank you for your prompt attention to this matter. I look forward to your response. 

Sincerely, XXXX XXXX

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation