Consumer complaint received 2026-06-10 00:00:00
Product: Mortgage — Home equity loan or line of credit (HELOC)
Issue: Struggling to pay mortgage — Foreclosure
Company: Franklin Credit Management Corporation
State: CA

Complaint narrative:
I previously submitted a complaint to the Consumer Financial Protection Bureau concerning this matter. On XX/XX/XXXX, I spoke with a CFPB representative regarding my concerns and was advised to submit a new complaint containing additional information that has become available since my prior filing. This complaint concerns a dormant ( " zombie '' ) second mortgage Home Equity Line of Credit ( " XXXX '' ) originally issued by XXXX XXXX XXXX XXXX XXXX with a credit limit of approximately {$65000.00}. In XX/XX/XXXX, XXXX XXXX XXXX XXXX XXXX was placed into conservatorship by the XXXX XXXX XXXX XXXX ( XXXX ). In XX/XX/XXXX, XXXX involuntarily liquidated XXXX XXXX XXXX XXXX XXXX and transferred operations and member accounts to XXXX XXXX XXXX. In XXXX, a Full Reconveyance was recorded against the second mortgage loan. The Full Reconveyance remained of record for approximately XXXX years. During my first mortgage modification process, records maintained by my first mortgage lender reflected that no second lien existed against the property. In XXXX, the Full Reconveyance was cancelled without notice to me. For many years thereafter, I did not receive meaningful servicing communications, periodic account statements, transfer notices, payment demands, collection efforts, or accountings concerning the loan. On XX/XX/XXXX, I obtained a XXXX XXXX XXXX through CFPB assistance reflecting an alleged balance of approximately {$130000.00}. XXXX days later, on XX/XX/XXXX, a Notice of Default was recorded asserting an alleged indebtedness exceeding {$200000.00}. No meaningful accounting was provided explaining how a HELOC with an original credit limit of approximately {$65000.00} allegedly increased to approximately {$130000.00} and then to more than {$200000.00}. My property was subsequently foreclosed upon on XX/XX/XXXX. Following complaints submitted to CFPB and the California Department of Financial Protection and Innovation ( DFPI ), Franklin Credit Management Corporation entered settlement discussions concerning the disputed debt and foreclosure. During approximately XX/XX/XXXX, Defendants demanded approximately {$170000.00} to resolve the dispute. I informed Defendants that financing would be required if the demanded amount exceeded the original HELOC credit limit. I subsequently obtained financing sufficient to satisfy the settlement demand. However, the proposed settlement could not be completed because escrow and title requirements required restoration of title before financing proceeds could be released, while Defendants required payment, dismissal of claims, withdrawal of the lis pendens, and release of title-related rights before restoration of title would occur. As a result, the lender ultimately withdrew and the settlement was not completed. I believe these facts are significant because they demonstrate that this was not a situation where a borrower refused to pay or lacked the ability to resolve the alleged debt. Financing sufficient to satisfy the settlement demand was obtained. The transaction failed because of competing title and escrow requirements. I am also concerned because Franklin Credit Management was previously the subject of a settlement with the Attorney General of the Commonwealth of Massachusetts involving more than XXXX dormant or " zombie '' second mortgages. The circumstances of my loan appear consistent with many of the concerns that prompted governmental scrutiny in that matter, including the enforcement of long-dormant mortgage debt after years of limited borrower communication. In addition, California recently enacted AB 130 ( Civil Code section 2924.13 ) to address unlawful practices involving second-lien mortgage servicing and foreclosure activity. The circumstances of my case appear consistent with several of the consumer-protection concerns that prompted enactment of that legislation, including a dormant second mortgage loan, years without meaningful servicing communications, lack of periodic statements and accountings, substantial unexplained increases in alleged indebtedness, and foreclosure activity following years of dormancy. I respectfully request CFPB review of : The ownership and servicing history of the loan following the NCUA liquidation of XXXX XXXX XXXX XXXX XXXX ; Whether required servicing communications, transfer notices, and periodic statements were provided ; The basis for the increase from a {$65000.00} HELOC to alleged balances of approximately {$130000.00} and later more than {$200000.00} ; The accounting supporting the amounts claimed prior to foreclosure ; and The conduct of Franklin Credit Management Corporation and related entities in servicing and enforcing this dormant second mortgage loan. Supporting documents are attached for review.

Company response to consumer: Closed with explanation