Consumer complaint received 2025-11-06 00:00:00
Product: Mortgage — FHA mortgage
Issue: Trouble during payment process — Escrow, taxes, or insurance
Company: Data Mortgage Inc.
State: GA

Complaint narrative:
My XXXX mortgage is serviced by XXXX XXXX XXXX and I am experiencing extreme and unreasonable delays in the release of insurance loss draft funds after a covered home damage claim. The delays have created health and safety hazards for my family and may violate FHA servicing guidelines. 

On XX/XX/year>, our home at XXXX XXXXXXXX XXXX XXXX XXXX XXXXXXXX suffered a Category XXXX sewage backup, which caused extensive damage to walls, floors, and subflooring. Our insurer, XXXX XXXX, approved a claim for {$21000.00} on XX/XX/year>. The endorsed insurance check was delivered to XXXX XXXX XXXX XXXX XXXX on XX/XX/year>. 

Despite confirming receipt, XXXX XXXX  has not released the full funds necessary to begin mitigation and repair work. We have endured over a month of delays, during which our family has been forced to live with exposed sewage-contaminated flooring and mold growth. 

XXXX of Events : XX/XX/year> : Category XXXX sewage backup occurred. 
XX/XX/year> : XXXX XXXX  report and meter reading as well as Insurance Adjustor came to assess damage for Adjustors report to insurance XX/XX/year> : XXXX XXXX approved the full claim amount of {$21000.00}. 
XX/XX/year> : Check delivered to XXXX XXXX  XXXX XXXX XXXX. 
XX/XX/year> : I emailed XXXX ( XXXX ) and senior contacts ( XXXX, XXXX ) expressing concern for family health and safety, requesting full release per HUD Handbook 4000.1, Section III.A.1.f.iii ( page 640 ). 

XX/XX/year> : My husband was informed by phone only 25 % of the {$4600.00} mitigation line item ( {$1100.00} ) would be released, pending inspection and an XXXX business day hold for further funds an unnecessary delay under FHA rules. 

XX/XX/year> : After escalating and attaching supporting evidence, I still received no tracking for the reportedly released check. I was told additional funds would only be reimbursed after submitting paid receipts, meaning I must personally front all repair costs. 

During this entire time, I received no proactive communication from XXXX. When I asked about alternate processes due to the emergency nature of our situation, one representative stated : If you dont want to deal with us, just pay off your loan. This response was dismissive, unprofessional, and demonstrated disregard for FHA compliance and borrower safety.

Regulatory and Compliance Concerns : FHA Handbook 4000.1, Section III.A.1.f.iii requires that mortgagees disburse insurance proceeds for health and safety repairs without delay and may not require inspection if the claim is under {$35000.00} and supported by an adjusters report. My claim meets these criteria and should have been released immediately.

24 CFR 203.379 requires action to prevent further damage to an FHA-insured property. XXXX delay directly contradicts this regulation by allowing mold and structural decay to worsen. 

Failure of Servicer Communication : XXXX XXXX  failed to provide timely updates, tracking information, or clear instructions consistent with FHA and HUD policy. 

Impact on Borrower : The delay has forced me to consider credit card financing or a 401 ( k ) loan just to begin repairs. These are unnecessary financial burdens resulting from the servicers failure to act in a timely manner. The unsanitary conditions ( exposed raw sewage and mold ) pose ongoing health risks to my children and family.

Company response to consumer: Closed with explanation