Consumer complaint received 2025-05-25 00:00:00
Product: Credit reporting or other personal consumer reports — Credit reporting
Issue: Incorrect information on your report — Account status incorrect
Company: Midwest Loan Services, Inc.
State: AZ

Complaint narrative:
I have a mortgage via XXXX XXXX I had made all payments timely and had never been late. In XXXX, due to extended financial distress that started in XXXX, I had INQUIRED about a forbearance as I tried to earn more money to keep up with my bills. 

My servicer indicated that forbearance is available, but the letter sent to me indicated that it COULD result in reporting my mortgage as seriously delinquent or on a payment plan. I appealed this and indicated that I would refuse the forbearance if it would report my mortgage payments as being late, since I had never paid late, and that, if my mortgage would be reported as being paid delinquent, it would be so detrimental, that I would rather file for bankruptcy than accept a forbearance. 

I received a telephone call from servicer who said that the information on the letter was required language but that, since I had never been late on my mortgage, that this did not apply to me. It may only report as being on a payment plan or in forbearance but would NOT report as late mortgage payments.

throughout the forbearance period, the servicer website for mortgage payments was locked out .. I couldn't make a payment if I wanted to.

When I was making more money I notified servicer, they proposed a trial period payment, and I accepted. 
Within DAYS of the trial period reinstatement, the servicer suddenly reported that my mortgage was 180 days late. This is on top of also reporting the entire history of my mortgage as paid on time/never late. 

This is a violation of FDCPA and Fair & Accurate Credit Reporting Act. My payments were never late, and forbearance was an agreement to waive payments for a period. Also, servicer has a financial motivation from XXXX to encourage borrowers to enter forbearance, and apparently will tell a borrower whatever they have to tell them to get them to accept/enter forbearance, as they have a financial motivation to do so. 

As a result of servicer reporting my mortgage as 180 days late, my XXXX XXXX went from XXXX, down to XXXX. 

my credit card companies, being notified of the mortgage account status and the now downgraded XXXX  XXXX.... all lowered my credit limits from XXXX 's of thousands of dollars, down to the current balance, thereby destroying my balance to limit %, which erodes my XXXX  XXXX  even further. 

XXXX  policies need to be clear that forbearance WILL, Automatically, no exception result in monthly mortgage late payments for every month of forbearance, notify consumers that the servicer has an explicit monetary incentive to lie to consumers to induce them to accept the forbearance, and to advise that that consumer may choose as a better option to file for bankruptcy anyway since the servicer and fnma will lie to the consumer, tell them that they won't report the mortgage as late, when there was never a late payment.... and will financially ruin the consumer for accepting a forbearance.

Company response to consumer: Closed with explanation