Consumer complaint received 2024-02-18 00:00:00
Product: Mortgage — FHA mortgage
Issue: Trouble during payment process — Payment process
Company: TOWNE MORTGAGE COMPANY
State: SC

Complaint narrative:
I closed on my house in XX/XX/XXXX and my first payment was due on XX/XX/XXXX. I paid the scheduled payment of XXXX and it posted to my account on XX/XX/XXXX. I then elected to pay recurring weekly payments in the amount of XXXX starting XX/XX/XXXX. I set this up on XX/XX/XXXX and I have a confirmation email as proof. This weekly recurring payment was to be held in a suspense account until sufficient funds accumulated a full monthly mortgage payment and then it was to be applied to my loan ( which would be for the XX/XX/XXXX payment ). 
By setting these weekly recurring payments up this way, I would never have to worry about my house payment when it came due on the first of each month, or so I thought. Towne Mortgage took XXXX weekly payments and applied them to principle only which caused my monthly mortgage payment to fall behind. They took the weeks of XX/XX/XXXX, XX/XX/XXXX and XX/XX/XXXX and applied it to PRINCIPLE BALANCE ONLY. A total of XXXX was misapplied. I had my wife call them and they tried to say that with the weekly payments, every XXXX payment is applied this way. The months they misapplied my payment IS NOT the XXXX payment and no where in my loan disclosure documents or in the confirmation email, when setting this up, informed me that they would take any payment and apply it to principle only. In fact, on the authorization form they ask how much I wanted to pay EXTRA to the principle and I specified a specific amount that they were to apply and paid in extra for that. The months in XXXX where we had extra weeks were XXXX, XXXX, XXXX and XXXX so if any weeks were to be applied to principle, it would have made more sense to take the extra weeks from those months. 
They refunded XXXX for the XX/XX/XXXX week and put it in my suspense account but refuse to credit me for the XX/XX/XXXX and XX/XX/XXXX payments that, when added together, total XXXX. According to Towne Mortgage, after crediting me the XX/XX/XXXX weekly payment, I have XXXX in the suspense account. If you take what's in my suspense account and add the XXXX they misapplied that would be XXXX which would cover the XXXX XXXX payment. If you take my payments which began XX/XX/XXXX in the amount of XXXX and multiply that by the number of monthly payments ( going to XX/XX/XXXX ) that is 14 months and totals {$20000.00} According to what I have paid in and verified with Towne Mortgage 's payment history they provided, I have paid in a total of XXXX. There is no way I should be behind and have to struggle to catch up when I have paid in above what the scheduled payments total up to be. My wife was told that they can't fix the problem because they have investors and they have already closed the books for the year but they credited the XX/XX/XXXX week which falls in the close of XXXX so that excuse makes no sense. I think it is just that they don't want to be bothered and do extra work to fix their mistakes. I am attaching a copy of the loan disclosure highlighted which shows that they were to hold my money in a suspense account, not apply it to principle or take the XXXX payment to apply it to principle. I am also attaching an email that I received when setting up the weekly recurring payments which indicates how they would apply the payments as well.

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation