Consumer complaint received 2026-05-27 00:00:00
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — Private mortgage insurance (PMI)
Company: Midwest Loan Services, Inc.
State: TX

Complaint narrative:
I have a conventional 30-year fixed-rate mortgage at 6.000 % with borrower-paid private mortgage insurance ( PMI ) of {$140.00} per month, collected through my escrow account. The original loan value was {$410000.00}, making the 78 % automatic PMI termination threshold {$310000.00} under the Homeowners Protection Act ( 12 U.S.C. 4902 ( b ) ). The Violation : On XX/XX/XXXX, I made a lump-sum principal payment of {$290000.00}, which was applied to my loan balance on that date. This payment reduced my outstanding principal balance from approximately {$380000.00} to approximately {$99000.00} representing only 24.2 % of the original loan value, and {$220000.00} below the 78 % automatic PMI termination threshold of {$310000.00}. On that same date XX/XX/XXXX the servicer simultaneously processed a loan modification and charged a {$250.00} modification fee, as confirmed by my XX/XX/XXXX mortgage statement. This proves the servicer had actual, contemporaneous knowledge of the new loan balance at the time of the modification. Under 12 U.S.C. 4902 ( d ), the servicer was required to recalculate the PMI termination date upon execution of the modification. Based on the new balance of approximately {$99000.00}, the 78 % threshold was immediately and unconditionally met, requiring immediate PMI termination as of XX/XX/XXXX. Despite this knowledge, the servicer did not cancel PMI. Monthly PMI disbursements of {$140.00} continued without interruption for approximately XXXX consecutive months after the mandatory termination date from approximately XXXX XXXX through at least XX/XX/XXXX. This is a violation of 12 U.S.C. 4902 ( b ) ( automatic termination ), 12 U.S.C. 4902 ( d ) ( recalculation following modification ), and 12 U.S.C. 4902 ( e ) ( prohibition on continued collection beyond 30 days after termination date ). Total Unearned Premiums Collected Illegally : Approximately {$2500.00} {$2700.00}, plus interest accruing from XX/XX/XXXX. Actions I Took : On XX/XX/XXXX, I submitted a Qualified Written Request ( QWR ) to the servicer pursuant to 12 U.S.C. 2605 ( e ), citing the HPA violation and demanding ( 1 ) immediate PMI cancellation, ( 2 ) a full refund of all unearned premiums, and ( 3 ) a complete loan payment history. On XX/XX/XXXX, the servicer acknowledged receipt of my QWR via letter signed by the Mortgage XXXX XXXX XXXX. On XX/XX/XXXX, the servicer mailed a " Request to Cancel PMI '' form. This form confirmed my current XXXX was XXXX XXXX corroborating the violation but did not address the refund of past overcharges, did not acknowledge the illegal collection period, and did not provide the complete payment history I requested. This response does not constitute a substantive response to my legal claims. On XX/XX/XXXX, I paid off the loan in full via wire transfer. The loan is now fully satisfied and closed. However, the obligation to refund unearned PMI premiums survives payoff under 12 U.S.C. 4902 ( f ) ( 1 ), which requires all unearned premiums to be returned within 45 days of the termination date. Current Status : As of XX/XX/XXXX, I have not received any refund of the approximately {$2500.00} {$2700.00} in PMI premiums illegally collected after XX/XX/XXXX. The servicer has not provided the complete loan payment history requested in the QWR. The 30-business-day QWR response deadline under 12 U.S.C. 2605 ( e ) expires on approximately XX/XX/XXXX. The 45-day refund deadline under 12 U.S.C. 4902 ( f ) is approximately XX/XX/XXXX. What I Am Requesting From the CFPB : I am requesting that the CFPB compel the servicer to : ( 1 ) issue a full refund of all PMI premiums collected after XX/XX/XXXX, plus accrued interest ; ( 2 ) provide written confirmation of the refund amount and payment date ; and ( 3 ) provide a complete certified loan payment history from origination through payoff as requested in my QWR. I am also requesting that the CFPB investigate whether this same practice has affected other borrowers of this servicer who made similar large principal payments or underwent loan modifications without receiving required PMI termination.

Company response to consumer: Closed with explanation