Consumer complaint received 2025-11-25 00:00:00
Product: Mortgage — VA mortgage
Issue: Struggling to pay mortgage — An existing modification, forbearance plan, short sale, or other loss mitigation relief
Company: MIDFIRST BANK
State: VA

Complaint narrative:
I am a United States XXXX XXXX veteran with a XXXX home loan serviced by XXXX XXXX ( a division of MidFirst Bank ) . My original interest rate was 2.75 %. After experiencing financial hardship, I sought loss mitigation assistance from XXXX XXXX. 

TIMELINE OF VIOLATIONS : XX/XX/year> : President Trump signed the VA Home Loan Program Reform Act ( H.R. 1815 ) into law, establishing a permanent partial claim program ( TVAP - Traditional VA Partial Claim ) with full funding appropriated by Congress. This program allows Veterans to bring their loans current and resume payments at their original interest rate with no rate increase.

XX/XX/year> : Despite TVAP being fully available and funded for nearly two months, XXXX requested approval from the VA to exceed the 1 % interest rate cap established in 38 C.F.R. 36.4315. The VA approved this request. 

XX/XX/year> : XXXX  sent me a loan modification offer with the following illegal and predatory terms : ILLEGAL INTEREST RATE : 6.75 % ( a 4 % increase from my original 2.75 % rate, far exceeding the 1 % cap ) ILLEGAL FEE CAPITALIZATION : Principal balance inflated from approximately {$500000.00} to {$540000.00} by capitalizing {$40000.00} in fees that VA guidelines require servicers to waive PREDATORY 40-YEAR TERM : Extended loan term to make monthly payment appear affordable while extracting hundreds of thousands in additional interest MATURITY DATE : XX/XX/year> XXXX XXXX XXXX : After researching VA regulations, I contacted the VA to question this modification. XXXX XXXX, a VA Loan Servicing Officer and supervisor, responded in writing on XX/XX/year>, making the following FALSE and misleading statements : 1.

" The tVAP program currently does not have funding '' 2.

The VA is " approving pre-approvals for interest rate increases exceeding 1 % '' to " keep Veterans in their homes '' 3.

The VA claims they " can not force the servicer to take any specific actions '' THE VA 'S CLAIM ABOUT TVAP IS PROVABLY FALSE : TVAP was signed into law with full Congressional funding on XX/XX/XXXX, XXXXnearly 2 months BEFORE XXXX requested the waiver. The VA is either : 1.

Deliberately lying to justify illegal modifications that profit servicers 2.

Incompetent and unaware of the law they're supposed to enforce 3.

Confusing VASP ( which ended XX/XX/year> ) with TVAP ( which began XX/XX/year> ) SPECIFIC VIOLATIONS : 1. VIOLATION OF 38 C.F.R. 36.4315 : XXXX exceeded the 1 % interest rate cap by 3 full percentage points. This regulation exists specifically to protect veterans from predatory rate increases during financial hardship.

2. ILLEGAL FEE CAPITALIZATION : XXXX capitalized {$40000.00} in fees ( late fees, legal fees, etc. ) that should have been waived per VA servicing guidelines, then charged me 6.75 % interest on those illegal fees for 40 yearsprofiting from their own violation.

3. FAILURE TO OFFER LEGAL ALTERNATIVES ( 38 C.F.R. 36.4278 ) : At the time of this offer, TVAP was fully available and funded. TVAP would have allowed me to : Keep my original 2.75 % interest rate Resume my former monthly payment Bring my loan current with no fees capitalized Repay the deferred amount to the VA ( not the servicer ) over time XXXX also failed to offer other legal alternatives such as repayment plans or compliant modifications ( maximum 3.75 % rate within the 1 % cap ). Instead, they pushed the highest-profit illegal modification.

4. RESPA VIOLATIONS ( 12 C.F.R. 1024.41 ) : XXXX failed to evaluate my complete loss mitigation application and offer all available options within the required timeframe.

5. UDAAP VIOLATIONS : XXXX engaged in unfair, deceptive, and abusive practices by : Misrepresenting an illegal modification as legitimate Concealing the availability of TVAP Taking advantage of my lack of understanding of complex servicing rules Causing substantial injury, I could not reasonably avoid FINANCIAL HARM : Through these violations, XXXX is attempting to extract {$840000.00} in illegal profit from me over the life of the loan : {$40000.00} in illegally capitalized fees {$76000.00} in interest charged on those illegal fees {$720000.00} in excess interest from the illegal 4 % rate increase PATTERN OF SYSTEMIC VIOLATIONS : I believe this is not an isolated incident but a systematic pattern involving coordination between XXXX and the VA. According to CFPB complaint data, XXXX XXXX  has received 179 complaints in the past three years, including 28 from service members.

The VA 's false claim that TVAP has " no funding '' and their admission that they are routinely " approving pre-approvals for interest rate increases exceeding 1 % '' suggests : 1.

The VA is deliberately misrepresenting the law to justify illegal waivers 2.

Servicers like XXXX are exploiting this to maximize profits 3.

Thousands of veterans are being harmed by this coordinated scheme WILLFUL MISCONDUCT, NOT NEGLIGENCE : This is not a case of confusion or error. XXXX requested a waiver to exceed the 1 % cap DESPITE the availability of TVAP, which would have : Cost them less in servicing Complied with federal law Protected me from financial harm They chose the illegal option because it generates {$840000.00} in profit from me alone. The VA approved it based on a provably false claim about TVAP funding.

QUALIFIED WRITTEN REQUEST : I submitted a Qualified Written Request ( QWR ) under RESPA requesting detailed information about the legal basis for the 4 % interest rate increase, documentation of all capitalized fees, and explanation of why TVAP was not offered. I am awaiting their response.

WHAT I WANT : 1.

Immediate correction of my account : A loan modification that complies with all VA regulations, specifically : TVAP partial claim allowing me to resume payments at my original 2.75 % interest rate Removal of all illegally capitalized fees ( {$40000.00} ) A loan term of no more than 30 years 2.

Financial restitution : A full audit of my account to identify and refund all improper fees, plus compensation for the financial harm caused by these predatory practices.

3.

Investigation and enforcement : I request that the CFPB conduct a full investigation into : XXXX XXXX XXXX systematic pattern of violating the 1 % interest rate cap on VA loans The VA 's practice of routinely approving waivers based on false claims about TVAP availability The coordination between servicers and the VA that enables these predatory practices Whether other servicers are engaging in the same scheme This is a clear case of predatory lending and willful violation of federal law designed to extract maximum profit from veterans in financial distress. The VA 's provably false statement about TVAP funding demonstrates this is not negligence but deliberate misconduct to circumvent Congressional intent and veteran protections.

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