Consumer complaint received 2026-05-07 00:00:00
Product: Mortgage — VA mortgage
Issue: Struggling to pay mortgage — Trying to communicate with the company to fix an issue related to modification, forbearance, short sale, deed-in-lieu, bankruptcy, or foreclosure
Company: Ocwen Financial Corporation
State: AZ

Complaint narrative:
PHH Mortgage ( Onity Mortgage ) mishandled my VA-backed mortgage by failing to clearly disclose that deferment was not available before allowing me to move forward with forbearance. In late XXXX / early XXXX, after a major financial change following divorce, I contacted PHH proactively because I could not afford the full mortgage payment alone while the jointly owned home remained listed for sale. I specifically asked about a deferment-type option where missed payments could be moved to the back of the loan. PHH never clearly told me that deferment was not available on my VA-backed loan. Instead, PHH continued processing applications and allowed me to believe that if I kept applying or completed the forbearance/loss mitigation process, deferment could still potentially be approved. I chose to move forward with forbearance because PHH allowed me to believe deferment remained a possible outcome. I would not have relied on forbearance the same way if PHH had clearly told me from the beginning that deferment was not available. After forbearance, I was told I would need to reinstate the loan or accept a modification. The current reinstatement amount is {$19000.00}, including {$14000.00} in principal and interest, {$3700.00} in escrow, {$120.00} in late charges, {$25.00} in bad check fees, {$60.00} in property inspection fees, and {$250.00} in miscellaneous fees. PHH also offered a XXXX modification at approximately 5.75 % with a monthly payment of about {$3100.00} beginning XX/XX/XXXX, but I did not accept the modification. We are paying down the reinstatement balance to keep the existing mortgage terms in place. I later contacted the VA and was told deferment was never available for my VA loan. PHH should have clearly disclosed this before allowing me to proceed while believing deferment could still be approved. PHH also failed to clearly explain that entering or continuing through forbearance would result in the loan being placed into default/delinquency status. I was trying to avoid default, not create one. At no point was it clearly explained to me that moving forward with forbearance would lead to the loan being treated as in default, create a large reinstatement balance, trigger additional fees, and potentially affect my credit and the ability to sell the home. I contacted PHH because I was trying to prevent default. Instead, PHH placed me into a process that resulted in default without clearly warning me that this would be the consequence. I was never clearly told that forbearance would lead to the loan being treated as delinquent/defaulted or that I would later be required to reinstate the loan with nearly {$20000.00} to preserve the existing mortgage terms. I am requesting a full written explanation of why deferment was not disclosed as unavailable, all call notes and loss mitigation records, correction of any negative credit/default reporting, and review/waiver of fees or charges caused by PHHs unclear or improper handling.

Company response to consumer: Closed with explanation