Consumer complaint received 2025-12-29 00:00:00
Product: Mortgage — FHA mortgage
Issue: Trouble during payment process — Trying to communicate with the company to fix an issue while managing or servicing your loan
Company: LoanCare, LLC
State: WA

Complaint narrative:
I am submitting this complaint regarding ongoing mortgage servicing delays, inconsistent and misleading information, lack of transparency, and unreasonable handling of insurance loss draft proceeds on my FHA-insured mortgage. 

My covered water loss occurred on XX/XX/year>. LoanCares Loss Draft department received the first insurance claim check in the amount of {$12000.00} on XX/XX/year>. LoanCare endorsed that check and released it to me without requiring escrow holdback, inspection, or additional documentation. 

On XX/XX/year>, XXXX XXXX issued additional insurance checks related to the same loss. At that point, LoanCare advised that all remaining insurance proceeds must now be held in an escrow account and that I would be required to complete several additional steps and provide further documentation in order to access those funds. This represented a significant shift in handling compared to the initial check and caused immediate confusion and stress. 

During these conversations, I was advised that all vendors, including my water mitigation company and my movers, were required to provide contracts, documentation, and inspections before funds could be released. I questioned this guidance, as it appeared inconsistent with how the first check was handled and did not align with my understanding of FHA requirements for non-repair funds. I also explained that no reconstruction work had yet occurred to inspect, as I needed the insurance proceeds in order to begin repairs. 

When I requested the policy authority governing these requirements, I was told to go look at your mortgage contract. I then asked LoanCare to supply the applicable contract or policy. Customer service advised me to check my online documents portal, which was empty. I was subsequently told LoanCare did not have the documents. When I requested my servicing file, the only document provided was an incomplete copy of my note ( page XXXX only ; the signature page is missing ), not the governing servicing agreement or mortgage documentation being referenced. 

Due to the lack of written authority and inconsistent information, I submitted exception requests on XX/XX/year>, and was verbally advised that I would receive a response within 710 business days. No response or interim update was provided within that timeframe. 

My exception request was initially made by phone, at which time I was advised to also submit the request via email to XXXX and to upload supporting documentation through the insurance portal. I complied with all of these instructions. In addition to the initial submission, I sent a follow-up email on XX/XX/year>. Despite using every channel I was directed to use and following up as instructed, I did not receive any response within the stated 710 business-day timeframe, nor did I receive any interim updates prior to the XX/XX/year> verbal denial. 

It is also important to clarify that my initial communications beginning on XX/XX/year>, focused on payee authority concerns, due to the lack of servicing documentation provided to me and the absence of publicly recorded authority supporting the procedures being imposed. At that time, I was seeking written confirmation of who held authority over the insurance proceeds and under what policy or contractual basis those requirements were being applied. In addition to these authority-related concerns, I also requested endorsement and release of the insurance proceeds in order to pay outstanding vendors and begin repairs. This request was made by phone and reiterated in writing on XX/XX/year>, after it became clear that the continued lack of guidance and explanation regarding the insurance funds was preventing payment to my moving company and XXXX and placing my property at risk of further harm. Despite clearly communicating both the authority concerns and the need for release of funds through multiple channels, no timely written response or resolution was provided. 

Due to the continued lack of written authority and inconsistent guidance, I submitted a Qualified Written Request ( QWR ) on XX/XX/year>, seeking documentation and clarification regarding the servicing of my loan, the handling of insurance proceeds, and the authority governing the procedures being imposed. I received acknowledgment letters dated XX/XX/year>, and XX/XX/year>. LoanCare received the XXXX, and I am currently awaiting a substantive response. Despite the QWR being outstanding, the servicer has continued to impose procedural requirements and delays without providing the requested written explanations or records. 

The initial insurance proceeds of {$12000.00}, released on XX/XX/year>, were intended to begin reconstruction. However, at that time I had received no clear or consistent guidance regarding how my water mitigation company and moving expenses were to be handled or paid. 

On XX/XX/year>, my water mitigation company notified me that it intended to place a lien on my home due to non-payment. In order to avoid a lien and further harm, I promptly issued payment to the mitigation company from the {$12000.00} proceeds. This decision was made solely to prevent a lien and was necessitated by the lack of timely direction and release of additional insurance funds. As a result, I no longer have sufficient funds to pay the moving company or provide the required deposit to my XXXX to begin repairs, and I remain dependent on the release of the remaining insurance proceeds to move forward. 

After approximately a month with no response, I filed a BBB complaint on XX/XX/year>. Only after that escalation did I receive a response from LoanCare on XX/XX/year>. That response was a verbal denial of my exception requests, issued without any written policy authority or explanation supporting the decision. 

On XX/XX/year>, I was denied access to the insurance loss draft portal and received a message stating : Your claim requires special handling. We apologize for the inconvenience, but your claim requires special handling outside of the website. This restriction further limited transparency while funds remained unreleased and reviews were ongoing. 

Despite LoanCare confirming receipt of the insurance checks totaling {$30000.00} on XX/XX/year>, on XX/XX/year>, I was informed via phone call that funds designated for moving and transition expenses would remain unreleased and that a new review process would apply. I was advised that these exception requests would require 710 business days for review, followed by approximately 2 additional business days for processing and an additional 35 business days for payment issuance, creating delays of up to 17 business days despite LoanCare already being in possession of the insurance proceeds. 

On XX/XX/year>, I followed up by email with LoanCares XXXX XXXX XXXX XXXX to formally document this verbal update and the newly stated delay timeline. At this point, I had given notice that I intended to move forward with submitting formal complaints to the CFPB and HUD. 

On XX/XX/year>, I received a call from XXXX, the inspection vendor, asking whether an inspection had been scheduled. I advised the caller that I was awaiting the outcome of a pending exception request to waive the inspection requirement. The vendor indicated that they would relay this information back to LoanCare. 

On the morning of XX/XX/year>, I regained access to the insurance loss draft portal without any explanation or written communication regarding the status of my exception request. The portal did not provide clarity as to whether an inspection was required or whether my exception request remained under review. 

Also on XX/XX/year>, I received another past-due notice from my moving and storage company due to non-payment. I immediately documented this additional harm by emailing LoanCares XXXX XXXX XXXX XXXX and copying Lakeviews Issue Resolution team to ensure the ongoing financial impact was noted in the servicing record. 

Later on XXXX, XXXX, XXXX with LoanCare provided a written explanation for the continued withholding of funds. In that response, LoanCare stated that client guidelines require an inspection to confirm the status of the property before additional funds will be released, and cited inspection benchmarks tied to 50 % and 100 % completion of repairs. 

I responded that this is problematic because no repair or reconstruction work has commenced, as the funds required to begin work have not been released, an inspection tied to repair progress can not confirm repair status where no work has occurred, conditioning the release of initial repair funds on inspection milestones presupposing repair activity creates a circular requirement that prevents the claim from progressing, funds designated for moving and transition expenses are non-repair proceeds and, under FHA servicing guidance, are not tied to inspection or repair completion and should be promptly released, inspection availability is limited, and delays in scheduling inspections are outside of borrower control, further compounding the delay. 

Throughout this process, I have promptly provided all requested documentation, including invoices, a signed XXXX agreement with full scope and pricing, a valid XXXX XXXX ( which does not expire ; a newly dated XXXX  XXXX was later approved but should never have been a basis for delay ), a signed conditional lien waiver, proof XXXX insurance, and a complete Encircle water mitigation report with photographs documenting work performed. All of which were now accepted and should be viewed as an approved viable repair plan. 

From XX/XX/year>, through the present, I have made multiple attempts via email to resolve these issues with LoanCares XXXX XXXX XXXX XXXXXXXX and have also sent several update emails to XXXX Issue Resolution team requesting assistance in facilitating the release of insurance proceeds. Despite these continued efforts and escalation to senior-level contacts, the funds remain unreleased and no clear written resolution has been provided. Given the prolonged delays, shifting requirements, lack of transparency, and continued harm, I have serious concerns regarding the quality control and oversight exercised in the handling of my insurance proceeds. 

Additional concerns include repeated document rejections without timely explanation, initiation of an inspection workflow after mitigation was completed and paid ( despite no reconstruction having begun and no written authority provided ), fluctuating portal access, and ongoing financial harm including monthly storage fees and XXXX scheduling impacts. 

I escalated these concerns internally and through a BBB complaint, which received a response from a XXXX XXXX of Compliance at XXXX. Despite this escalation, delays continue and no written policy justification has been provided. 

I am also aware, based on publicly available complaints, that other consumers have raised concerns regarding similar servicing issues. I raise this only as contextual information to underscore the importance of reviewing whether adequate oversight and controls are in place. 

I believe this conduct reflects unreasonable delay, inconsistent and misleading servicing practices, and a lack of transparency in the handling of FHA insurance proceeds. I respectfully request CFPB and HUD review and assistance in obtaining timely resolution and written clarification.

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