Consumer complaint received 2026-01-25 00:00:00
Product: Mortgage — FHA mortgage
Issue: Struggling to pay mortgage — Applying for or obtaining a modification, forbearance plan, short sale, or deed-in-lieu
Company: Freedom Mortgage Company
State: TX

Complaint narrative:
Formal Complaint Narrative : Freedom Mortgage Corporation Complaint Filed By : [ Borrower Names ] Loan Number : [ Loan Number ] Collateral Address : [ Property Address ] Current Mailing Address : [ Mailing Address ] Subject : Violation of Regulation X ( RESPA ) & HUD Guidelines Improper Denial of Loss Mitigation & Failure of Reasonable Diligence To Whom It May Concern : We are filing this formal complaint against Freedom Mortgage Corporation for specific violations of the Real Estate Settlement Procedures Act ( Regulation X ) and FHA Servicing Guidelines regarding the mishandling of our forbearance exit and subsequent denial of loss mitigation.

1. The " Technical Default '' Created by Servicer Instruction ( Violation of 12 CFR 1024.41 ( b ) ( 1 ) ) We entered a 90-day forbearance agreement starting XX/XX/XXXX, due to a temporary hardship ( elder care ). During the week of XX/XX/XXXX, prior to the forbearance expiration, we contacted Freedom Mortgage to arrange a loan modification repayment plan.

Freedom Mortgage representatives instructed us that we must formally exit the forbearance plan before they could process a loan modification application. We followed this instruction, calling the week of XX/XX/XXXX. However, Freedom Mortgage then took over 30 days to process the application, during which time they reported the loan as delinquent for all months on forbearance and during processing time. By instructing us to exit a protected status without processing the modification concurrently, Freedom Mortgage failed to exercise " reasonable diligence '' as required by 12 CFR 1024.41 ( b ) ( 1 ), effectively manufacturing a technical default and penalizing us for their own administrative delay. It was their directive to call one week prior to the end of the forbearance.

2. Improper Denial Based on " Seasoning '' ( Violation of HUD Handbook 4000.1 ) We were subsequently denied all retention options ( Loan Modification, Partial Claim, Repayment Plan ) with the stated reason being " Minimum Payment Seasoning. '' This is a clear misapplication of FHA Streamline Refinance Guidelines ( Section II.A.8.d ) to a Loss Mitigation file.

The Law : Under HUD Handbook 4000.1, Section III.A.2.k, there is no statutory requirement for 6 months of consecutive payments for a borrower exiting forbearance to qualify for a COVID-19 Recovery Standalone Partial Claim.

The Error : Freedom Mortgage is applying " Refinance '' eligibility criteria to a " Loss Mitigation '' request, illegally blocking us from a standard FHA remedy.

3. Failure to Provide Single Point of Contact ( Violation of 12 CFR 1024.40 ) Although we were assigned a " Single Point of Contact '' ( SPOC ) named XXXX ( Teller # XXXX ) via a mailed letter to us, we were never able to reach this individual. Instead, we were passed to multiple unknowledgeable representatives ( XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX ) who provided conflicting information and merely read from scripts. This failure to provide a knowledgeable, accessible SPOC violates the continuity of contact requirements of 12 CFR 1024.40.

4. Income Calculation Error Freedom Mortgage failed to include all sources of our household income in their review. We have submitted updated evidence showing a monthly net surplus of {$5300.00}, proving we have the capacity to resume payments immediately if the arrearage is cured via a Partial Claim.

Requested Relief : Immediate Re-evaluation : We request Freedom Mortgage be ordered to re-evaluate our file for a Standalone Partial Claim or Payment Deferral under the correct HUD Loss Mitigation guidelines, without the erroneous " refinance seasoning '' requirement.

Credit Correction : We request the suppression of negative credit reporting for XX/XX/XXXX, as this delinquency was caused by the servicer 's specific instruction to exit forbearance prior to application approval.

Written Response : We request a written explanation from a qualified regulatory specialist ( not a general customer service agent ) citing the specific HUD statute they believe allows them to deny a Partial Claim based on " seasoning. '' The Fair Immediate Resolution We demand that Freedom Mortgage immediately execute a Standalone Partial Claim ( or equivalent FHA Retention Option ) to resolve the arrearage caused by the forbearance period, under the following specific terms : 1. Capitalization of Arrears ( The " Fix '' ) : Action : Take the total unpaid principal, interest, taxes, and insurance ( XXXX ) accrued during the forbearance period ( XX/XX/XXXX XX/XX/XXXX ) plus the " gap '' month of XX/XX/XXXX. 

Mechanism : Move this total amount into a non-interest-bearing, silent second lien ( Partial Claim ) due only at loan maturity or payoff.

Result : This brings the loan immediately current without requiring a lump-sum payment from us.

2. Immediate Resumption of Standard Payments : Action : Reinstatement of our original ( or slightly modified ) monthly mortgage payment effective XX/XX/XXXX. 

Justification : We have verified income of ~ $ XXXX/month and a surplus of ~ $ XXXX/month, proving we have the immediate capacity to resume standard payments.

3. Credit Reporting Correction ( The " Clean Slate '' ) : Action : Suppress or remove all negative credit reporting ( 30/60/90-day lates ) for the months of XX/XX/XXXX and XX/XX/XXXX. 

Justification : The delinquency in these specific months was manufactured by Freedom Mortgage 's instruction to exit forbearance prior to processing the modification, a violation of the " reasonable diligence '' standard in 12 CFR 1024.41 ( b ) ( 1 ). We should not be penalized for following servicer instructions.

4. Waiver of All Late Fees : Action : Waive all late charges and property preservation fees assessed from XX/XX/XXXX, to present.

Justification : These fees are not permissible during a protected forbearance and loss mitigation review period.

Why this is " Fair '' : This resolution costs Freedom Mortgage nothing out of pocket ( FHA insures the Partial Claim ), returns the loan to " Performing Status '' instantly ( good for their books ), and protects us from foreclosure while correcting the credit damage caused by their administrative delays. It is a " textbook '' application of the HUD Waterfall for a borrower who has recovered from a temporary hardship.

We are submitting a concurrent appeal directly to Freedom Mortgage via next-day mail. We ask the CFPB to investigate these procedural violations immediately. We are also doing the same for the U.S. Department of Housing and Urban Development Office of Housing Federal Housing Commissioner.

Sincerely, [ Borrower Names ] [ Phone Number ] [ Mailing Address ]

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