Consumer complaint received 2026-05-29 00:00:00
Product: Mortgage — VA mortgage
Issue: Trouble during payment process — Payment process
Company: Ocwen Financial Corporation
State: CA

Complaint narrative:
SUPPLEMENTAL CFPB COMPLAINT / NOTICE OF ERROR / REQUEST FOR INFORMATION / CREDIT REPORTING DISPUTE Borrowers : XXXX XXXX XXXX and XXXX XXXX XXXX Property : XXXX XXXX XXXX, XXXX, CA XXXX Loan / Account Number : XXXX Servicer : Onity Mortgage Corporation , formerly PHH Mortgage Corporation Original CFPB Complaint ID : XXXX Original CFPB Complaint Submitted : XX/XX/XXXX Onity Response to Original Complaint : XX/XX/XXXX Related State Assistance Application : XXXX XXXX XXXX / XXXX Requested Relief : Deletion of 30-day late reporting, XXXX correction, fee waiver, ledger correction, production of XXXX records, and rescission/closure of default or pre-foreclosure activity tied to the disputed state-assistance cycle. I. PURPOSE OF THIS SUPPLEMENTAL COMPLAINT This is a supplemental CFPB complaint, formal RESPA Notice of Error, Request for Information, and direct credit-reporting dispute concerning Onity Mortgage Corporations handling of my VA-backed mortgage account. This complaint supplements and incorporates my original CFPB complaint, Complaint ID XXXX. That original complaint challenged Onitys mishandling of the XXXX XXXX XXXX XXXX XXXX payment cycle, related payment-processing issues, credit reporting, fees, default notices, and pre-foreclosure activity. Onity responded to that complaint on XX/XX/XXXX. Onitys response did not resolve the issue. Instead, Onity attempted to justify the disputed 30-day late by isolating the matter to a XX/XX/XXXX automated credit-reporting snapshot. That response is incomplete and materially misleading because it separates the derogatory credit reporting from the XXXX XXXX XXXX process that created or materially contributed to the disputed account status. This is not an ordinary missed-payment dispute. This is a state mortgage-assistance servicing failure. Onity accepted public XXXX cure funds directly from the state, controlled the processing and confirmation of those funds, admitted delay in processing the XXXX funds, admitted XXXX file discrepancies, corrected and resubmitted information to the state, used internal suppression capability for XX/XX/XXXX, and then reported or preserved a 30-day late based on the same defective state-fund administration cycle. The disputed 30-day late was preventable and should be deleted. II. THE ORIGINAL CFPB COMPLAINT AND ONITYS RESPONSE My original CFPB complaint, ID XXXX, explained that this loan was transferred from XXXX XXXX XXXX XXXXk to PHH/Onity effective XX/XX/XXXX, and that the loan became part of an approved XXXX XXXX process. The complaint stated that XXXX approved assistance on XX/XX/XXXX, that funds were sent to the servicer, and that Onitys own XX/XX/XXXX mortgage statement showed a {$12000.00} payment posted on XX/XX/XXXX with a received/credited date of XX/XX/XXXX. The complaint disputed negative credit reporting, fees, default notices, and California pre-foreclosure contact activity arising from the same XXXX servicing cycle. [ XXXX Detail.pdf ] ( sediment : XXXX ) Onitys XX/XX/XXXX response contains material admissions. Onity admitted that it received XXXX funds in the amount of {$12000.00} on XX/XX/XXXX. Onity admitted those funds were applied on XX/XX/XXXX to the XX/XX/XXXX, XX/XX/XXXX, and XXXX XXXX monthly payments. Onity admitted there was a delay in processing the XXXX funds. Onity also admitted that XXXX identified discrepancies in the file on XX/XX/XXXX, and that Onity corrected those issues and resubmitted updated confirmation to the state on XX/XX/XXXX. [ XXXX Detail.pdf ] ( sediment : XXXX ) Those admissions are central. They show that the account was not in a clean, ordinary borrower-delinquency posture. It was inside a state-funded mortgage-assistance administration cycle that Onity controlled and that Onity admits involved delay XXXX discrepancies, correction, and resubmission. III. XXXX XXXX XXXX AND CREDIT-REPORTING VIOLATION This complaint must be evaluated through the XXXXXXXX XXXX XXXX framework. CalAssist/HAF mortgage assistance is not a normal borrower payment. It is a state-administered mortgage-assistance process in which funds are paid directly to the mortgage servicer. That structure makes the servicer the control point. Once Onity accepted XXXX funds directly from the state, Onity controlled the critical steps : payment receipt, payment application, confirmation back to XXXX, discrepancy correction, suspense handling, ledger reconciliation, fee assessment, default status, foreclosure-track activity, and credit reporting. Onity can not accept state cure funds directly, admit delay in processing those funds, admit XXXX file discrepancies, correct and resubmit information to the state, use internal credit-reporting suppression for one cycle, and then preserve a 30-day late against the borrowers by pretending the account was in a clean borrower-caused default. That is the core violation. This is not a request for ordinary courtesy suppression merely because assistance was pending. This is a demand for deletion because the derogatory reporting arose from Onitys own administration of a state-funded cure program. The XXXX framework exists to prevent avoidable delinquency, default, foreclosure escalation, and displacement. Onitys handling did the opposite. It converted a state-funded cure process into a permanent borrower credit injury. At minimum, once Onity knew state funds were involved, once Onity knew XXXX processing had been delayed, and once Onity knew XXXX had identified file discrepancies requiring correction and resubmission, Onity had to place the account into manual XXXXXXXXXXXX review, hold, or suppression status before allowing automated default, fee, or XXXX reporting consequences to continue. Onity failed to do that. Instead, Onity allowed the account to snowball from a state-assisted cure file into a 30-day mortgage late, late/default/inspection-related fees, demand/default notices, California Civil Code 2923.55 pre-foreclosure contact activity, and continued refusal to delete the derogatory reporting after the account was later cured or paid forward. IV. ONITYS XX/XX/XXXX SNAPSHOT DEFENSE IS INCOMPLETE Onitys XX/XX/XXXX response rests on one narrow argument : because the XX/XX/XXXX payment allegedly had not been received by the XX/XX/XXXX reporting date, the account was more than 30 days delinquent and was accurately reported as past due. [ XXXX Detail.pdf ] ( sediment : XXXX ) That is not a complete answer. The legal and factual question is not whether Onitys automated system showed the XXXX installment due when viewed in isolation on XX/XX/XXXX. The question is whether Onitys reporting was accurate, complete, and not materially misleading in light of the full account history. The full account history includes : 1. Servicing transfer from XXXX XXXX XXXX XXXX to PHH/Onity effective XX/XX/XXXX. 2. Approved XXXX XXXX XXXX 3. State assistance funds paid directly to Onity as the servicer. 4. {$12000.00} in XXXX funds received by Onity on XX/XX/XXXX. 5. XXXX funds not applied until XX/XX/XXXX. 6. Onitys admission of delay in processing the XXXX funds. 7. XXXX XX/XX/XXXX identification of discrepancies in the file. 8. Onitys XX/XX/XXXX correction and resubmission to the state. 9. Onitys admitted XX/XX/XXXX credit-reporting suppression through Modification Pending Suppression. 10. Conflicting servicing communications regarding amounts due. 11. Late/default/inspection-related fees during the disputed cycle. 12. Default/pre-foreclosure communications issued while the state-assistance process was active. 13. Later account cure or paid-forward status through additional assistance. 14. Onitys continued refusal to delete the damaging 30-day late despite the account being cured and despite the admitted servicing irregularities. A mortgage 30-day late communicates to the credit market that the borrowers failed to pay as agreed. Here, that is materially misleading because the disputed period was dominated by state-funded mortgage assistance, direct servicer payment, Onitys own processing delay, XXXX discrepancies, correction/resubmission, suppression inconsistency, and later cure. V. ONITY CAN NOT SEPARATE THE CREDIT REPORTING FROM THE HAF PROCESSING DEFECTS Onitys response tries to divide the case into two boxes. The first box is the XXXX process, where Onity admits funds were received, admits processing delay, admits XXXX discrepancies, and admits correction/resubmission. The second box is credit reporting, where Onity claims the XX/XX/XXXX snapshot was accurate. Those boxes can not be separated. The XX/XX/XXXX credit-reporting status was downstream from the HAF processing, confirmation, discrepancy-resolution, and reconciliation chain. If that chain was delayed, discrepant, corrected, resubmitted, and under active state assistance administration, then the resulting reporting snapshot required manual review before Onity furnished or preserved a 30-day late. Automation is not a defense. If the inputs are delayed, discrepant, corrected, or under active state-program reconciliation, the automated output is unreliable. VI. ONITYS XXXX SUPPRESSION UNDERCUTS ITS OWN DEFENSE Onity admitted that XX/XX/XXXX credit reporting was suppressed because the account was placed in a Modification Pending Suppression status. [ XXXX Detail.pdf ] ( sediment : XXXX ) That admission is important. It proves Onity had the ability to suppress reporting when an internal account condition justified suppression. It also proves Onitys system was not mechanically incapable of preventing derogatory reporting. If Onity could suppress XXXX reporting based on an internal status, then it could and should have manually suppressed, reviewed, or corrected the XXXX reporting once it knew the XXXX file involved processing delay, discrepancies, correction/resubmission, and active state assistance. Onity can not claim helplessness before its automated reporting system when its own response proves suppression mechanisms existed. VII. NEW EVIDENCE AFTER ONITYS RESPONSE The original CFPB complaint, ID XXXX, closed after Onitys XX/XX/XXXX response and my feedback. That closure did not adjudicate the accuracy of the credit reporting and does not immunize Onity from correcting inaccurate or materially misleading furnishing. Since the original complaint and Onitys response, additional evidence confirms that Onitys XX/XX/XXXX posture was incomplete. The later account evidence shows that additional XXXX funds were applied, the account was cured or paid forward, no funds were being held in suspense, and the next payment due date advanced. This undermines Onitys continued preservation of the derogatory credit mark. Onity can not maintain a permanent 30-day late while ignoring the full cure and reconciliation of the same XXXXXXXX cycle that generated the disputed reporting. Even if Onity claims the XX/XX/XXXX reporting snapshot was technically accurate at the time, Onity had a duty to revisit, correct, and delete the derogatory reporting once the cure posted and once the account history showed that the late event resulted from state-assistance timing, servicer processing delay, XXXX discrepancy correction, and later reconciliation. VIII. REGULATION X / RESPA NOTICE OF ERROR AND REQUEST FOR INFORMATION This complaint is also a formal Notice of Error under RESPA and Regulation X, including 12 C.F.R. 1024.35, and a Request for Information under 12 C.F.R. 1024.36. The errors include : 1. Failure to timely and accurately process XXXX funds. 2. Failure to accurately reconcile the account during an active state-assistance cycle. 3. Failure to prevent default and credit-reporting consequences after known XXXXprocessing delay and CalAssist discrepancies. 4. Failure to manually review the account before furnishing derogatory credit information. 5. Failure to correct derogatory reporting after the account was cured or paid forward. 6. Failure to remove fees triggered by the disputed servicing cycle. 7. Failure to provide a complete and reliable explanation of payment application, state confirmation, suppression, and reporting decisions. 8. Failure to explain Onitys obligations and conduct as a participating servicer receiving CalAssist/HAF funds directly from the state. Onity had actual notice that the account status was disputed. Onity also had actual knowledge that XXXX processing delay and state-file discrepancies existed. Under Regu lation X, Onity was required to conduct a reasonable investigation, correct errors, and provide a complete explanation. It was not entitled to rely blindly on automated ledger output after learning the underlying HAF/payment data had been delayed, corrected, and disputed. IX. FCRA / REGULATION V CREDIT REPORTING DISPUTE This complaint is also a direct dispute of the disputed 30-day late reporting and any related derogatory coding under the Fair Credit Reporting Act and Regulation V. The reporting is inaccurate, incomplete, or materially misleading because it fails to reflect that the alleged delinquency arose from a state-assistance cycle involving : 1. Approved XXXX mortgage assistance. 2. Direct state payment to Onity as the servicer. 3. Onitys admitted delay in processing XXXX funds. XXXX. XXXX file discrepancies. 5. Onity correction/resubmission to the state. 6. Internal suppression capability. 7. Later cure or paid-forward account status. 8. Continued dispute and review. A mortgage credit report must fairly and accurately communicate the borrowers payment conduct. This reporting does not. It converts a disputed state-assistance servicing failure into a permanent borrower default. X. VA-BACKED LOAN / VETERAN SERVICING CONCERN This is a VA-backed mortgage loan. I am not relying on VASP as the primary basis for relief. However, VA oversight remains directly relevant because the disputed reporting and default status concern a VA-guaranteed loan. Onitys conduct should be reviewed for accurate VA loan servicing, default reporting, and any XXXX-related reporting. A VA borrower should not be reported or maintained as delinquent where the alleged delinquency arose from disputed XXXXXXXX processing, admitted servicer delay, file discrepancies requiring correction, and later cure. I request that Onity confirm whether any default status, delinquency status, or adverse servicing status was reported to VA, the investor, or through XXXX concerning this disputed period, and if so, that Onity correct or withdraw that reporting. XXXX. DEFAULT / PRE-FORECLOSURE ESCALATION Onity issued an XX/XX/XXXX Notice of Default / Demand Notice and a XX/XX/XXXX California XXXX XXXX XXXX XXXX XXXX XXXX. The original CFPB complaint specifically challenged those notices as part of the disputed servicing cycle. [ XXXX Detail.pdf ] ( sediment : XXXX ) Onity XXXX argue these notices were informational and did not commence foreclosure. That response is insufficient. These notices are still default/pre-foreclosure statutory communications. They were issued while the account was tied to an active CalAssist/HAF payment cycle, while Onity admits XXXX processing delay, and after XXXX identified file discrepancies that Onity had XXXX correct. Onity should certify that all default/pre-foreclosure activity tied to this disputed HAF/CalAssist servicing cycle has been closed, rescinded, withdrawn, or marked as issued during a disputed state-assistance reconciliation period. XXXX. FEES The disputed cycle included late, inspection, and assessed-expense fees, including a {$50.00} assessed expense and a {$110.00} late fee. XXXX response also defended late fees and inspection fees as valid under the loan documents. [ XXXX Detail.pdf ] ( sediment : XXXX ) That does not resolve whether the fees were proper under these specific facts. A servicer may not profit from fees triggered by its own processing delay, state-file discrepancies, contradictory notices, and failure to manually reconcile an active HAF/CalAssist account. Fees arising from this disputed cycle should be waived and permanently removed. XIII. MATERIAL RECORDS ONITY MUST PRODUCE Onitys XX/XX/XXXX response did not provide enough underlying documentation to support its conclusion that the HAF-processing delay and CalAssist discrepancies did not affect credit reporting. Onity should be required to provide : 1. The complete CalAssist/HAF communication log from XX/XX/XXXX through XX/XX/XXXX. XXXX. The XX/XX/XXXX HAF receipt record. XXXX. The XX/XX/XXXX XXXX application record. XXXX. The XX/XX/XXXX confirmation allegedly sent to XXXX. XXXX. The XX/XX/XXXX XXXX discrepancy notice. XXXX. The XX/XX/XXXX corrected/resubmitted confirmation. XXXX. The complete record explaining why XXXX was suppressed under Modification Pending Suppression. XXXX. The complete record explaining why XXXX was not similarly suppressed or manually reviewed. XXXX. All XXXX data furnished for XXXX, XXXX, XXXX, and XX/XX/XXXX. 10. The exact Account Status, Payment Rating, Payment History Profile, Compliance Condition Code, Special Comment Code, and suppression codes furnished or withheld during the disputed period. 11. Any VA, XXXX, investor, or default-status reporting made on this VA-backed loan XXXX 12. All internal notes concerning default, foreclosure referral, inspection fees, late fees, suppression, state assistance, XXXX, XXXX, and credit reporting. XXXX. The specific XXXX/XXXX servicer participation rules, payment-confirmation duties, discrepancy-resolution procedures, fee-handling procedures, default-hold procedures, foreclosure-suppression procedures, and credit-reporting procedures Onity agreed to follow when accepting state mortgage-assistance funds directly from XXXX. 14. The reason Onity did not place the account into a XXXX-related manual hold, suppression, or review status once it knew state funds had been received, XXXX processing had been delayed, XXXX had identified file discrepancies, and Onity had corrected/resubmitted information to the state. XIV. REQUESTED RELIEF I request that CFPB require Onity to do the following : 1. Delete the disputed 30-day late mortgage reporting from all consumer reporting agencies for both XXXX XXXX XXXX and XXXX XXXX XXXX XXXX 2. Correct all affected XXXX fields so the account reflects current/paid-as-agreed status for the disputed period. 3. Remove any derogatory 1 or 30-day late indicator in the Payment History Profile and replace it with the correct current/paid-as-agreed code. 4. Send correction/deletion files to XXXX XXXX XXXX, and any mortgage-specific, investor, VA, or default-reporting repository to which Onity reported the disputed delinquency. 5. Permanently waive and remove the {$50.00} assessed expense, the {$110.00} late fee, and any related inspection/default/corporate fees arising from the disputed XXXX cycle. 6. Provide a complete transaction history showing every XXXX payment received, the received date, effective date, application date, suspense activity, allocation across principal, interest, escrow, and resulting next-payment due date. 7. Provide all XXXX portal communications, confirmation logs, discrepancy notices, corrected submissions, and state communications from XX/XX/XXXX through XX/XX/XXXX. 8. Provide the full XXXX data furnished for XXXX, XXXX, XXXX, and XX/XX/XXXX, including Account Status, Payment Rating, Payment History Profile, Compliance Condition Code, Special Comment Code, and suppression codes. 9. Provide the basis for XX/XX/XXXX Modification Pending Suppression and explain why the same or similar manual suppression was not used for XX/XX/XXXX given the known XXXX-processing delay and XXXX discrepancy correction. 10. Confirm whether any VA, XXXX, investor, or mortgage-default reporting was made during the disputed period and correct or withdraw any inaccurate reporting. 11. Certify that all default/pre-foreclosure activity tied to the disputed XXXX cycle has been closed, rescinded, withdrawn, or marked as issued during a disputed state-assistance reconciliation period. 12. Confirm that the derogatory reporting will not be reinserted after deletion. 13. Identify the specific XXXX servicer participation rules, payment-confirmation duties, discrepancy-resolution procedures, fee-handling procedures, default-hold procedures, foreclosure-suppression procedures, and credit-reporting procedures Onity agreed to follow when accepting state mortgage-assistance funds directly from XXXX. 14. Explain why Onity accepted state cure funds, admitted XXXX-processing delay, corrected XXXX file discrepancies, and still allowed its automated reporting system to preserve a 30-day late against the borrowers. XV. GOOD-FAITH DELETION REQUEST IN THE ALTERNATIVE Even if Onity disputes technical liability, the record supports deletion as a good-faith correction. This 30-day late was not caused by borrowers simply ignoring a mortgage obligation. It arose during a state mortgage-assistance process in which Onity received XXXX funds directly from the state, applied them after delay, admitted processing delay, admitted XXXX discrepancies, corrected and resubmitted information to the state, used internal suppression for XXXX, later applied additional cure funds, and continued preserving a damaging mortgage delinquency mark. This was preventable. Onity could have manually suppressed, reviewed, corrected, or deleted the reporting once it knew the account was in a disputed XXXX reconciliation cycle. It chose instead to preserve a damaging mortgage 30-day late by relying on an automated reporting snapshot that did not fairly reflect the full account circumstances. For that reason, deletion is warranted either as a legal correction under RESPA/FCRA principles or, at minimum, as a good-faith deletion based on documented servicing confusion, state-assistance processing delay, internal discrepancies, suppression inconsistency, and preventable harm. XVI. FINAL STATEMENT This case is not about a borrower asking for special treatment because assistance was pending. This case is about a mortgage servicer accepting public XXXX cure funds directly from the state, admitting delay and state-file discrepancies in that fund-administration cycle, correcting and resubmitting information to the state, then preserving a 30-day late created by the same defective process. Onity controlled the payment application, confirmation, discrepancy correction, ledger status, default status, fee handling, and credit reporting. Onity can not use its own state-fund administration failure as the basis for permanent borrower credit damage. The XXXX program was designed to prevent avoidable mortgage delinquency, default, foreclosure escalation, and displacement. Onitys handling did the opposite. It converted a state-funded cure process into a derogatory XXXX event. That is why the 30-day late should be deleted, the related fees should be removed, the default/pre-foreclosure activity should be rescinded or marked as issued during a disputed XXXX reconciliation period, and all affected credit-reporting data should be corrected for both borrowers.

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