Consumer complaint received 2025-06-15 00:00:00
Product: Mortgage — FHA mortgage
Issue: Struggling to pay mortgage — An existing modification, forbearance plan, short sale, or other loss mitigation relief
Company: VIRGINIA HOUSING DEVELOPMENT AUTHORITY
State: VA

Complaint narrative:
Issue : Mortgage Servicer Ignored My Legal Rights and Mishandled My Loss Mitigation Application by Issuing a Trial Loan Modification Without Proper Review or Consent Company : Virginia Housing Development Authority ( VHDA ) Loan XXXX XXXX XXXX Date Problem Started : XX/XX/XXXX Description : I submitted a complete Borrower Assistance Package to VHDA on XX/XX/XXXX, including legal documentation proving I am the court-awarded owner of the property via a XXXX divorce decree, equitable distribution order, and deed. VHDA has failed to acknowledge me as the successor-in-interest ( SOI ) in violation of 12 C.F.R. 1024.36 ( i ), despite multiple submissions of proof of ownership and financial hardship, including a specific XXXX acknowledgment request sent via certified mail and email on XX/XX/XXXX, and reiterated an additional request in my XX/XX/XXXX package. 

VHDA also failed to comply with 12 CFR 1024.41 ( b ) ( 2 ) ( i ) ( B ) by not providing written acknowledgment of my complete loss mitigation application within XXXX business days, as required. 

Instead of properly evaluating my full loss mitigation package or offering all available options per 12 C.F.R. 1024.41, VHDA issued a unilateral trial modification on XX/XX/XXXX. This letter was addressed to the prior borrower, XXXX XXXX XXXX, with no explanation, no notification of appeal rights, and no analysis of alternatives. This violates federal servicing rules. 

The information on the portal stated XX/XX/XXXX XXXX XXXX XXXX XXXX XXXXXXXX XXXX XXXX XXXX XXXX XXXX, VA XXXX XXXX RE : VHDA Loan Number XXXX Dear Borrower ( XXXX ) : It is VHDA 's goal to assist you in retaining ownership of your home. 
A review of your financial situation shows you may qualify for a Loan Modification that will reinstate your account to a current status. 
Your account is presently due for XXXX through XXXX. 
As of the date of this letter, the arrearage totals {$21000.00}. 
This may include all or some of the following : Late charges, inspection fees, bad check charges, payoff fax fees, phone pay fees, corporate advances and escrow shortages. 
The indebtedness in the captioned case is in default. In consideration of Virginia Housing Development Authority ( VHDA ) extending forbearance for a period of time, it is necessary that you indicate, by signing this Letter of Agreement, your acceptance of the following conditions : * Beginning on XX/XX/XXXX, you agree to make monthly payments for the trial period as follows : {$780.00} XX/XX/XXXX {$780.00} XX/XX/XXXX {$780.00} XX/XX/XXXX * There is no grace period during the forbearance. Payments must be received in our office on or before the date indicated. 
When remitting payments, include your loan number on the check or money order and send to : VHDA XXXX XXXX XXXX XXXX XXXX, VA XXXXXXXX XXXX Monthly reporting of your mortgage to the credit bureau will occur and will state the actual status of your account. If a payment is missed, the account will be removed from the program and foreclosure proceedings may begin. 
* Please know it is your responsibility to inform VHDA of any changes to your financial situation. 
* On or before XX/XX/XXXX, if the above is accomplished, you are required to contact VHDA in which a brief financial review will occur to ensure the Loan Modification. 
XX/XX/XXXX XXXX XXXXXXXX XXXX  The Loan Modification pertains to the mortgage loan indicated in this letter. If you have a VHDA second mortgage, this agreement does not affect that account. You are required to continue to remit schedule payments on the second mortgage. Contact our Collections Department to discuss payment arrangements. 
* If this signed document is not received within XXXX ( XXXX ) business days from the date of this letter, then this Agreement will be considered null and void and your loan will be removed from this program. In addition, compliance with the terms of this Agreement are mandatory and, if not adhered to, could result in your loan being removed from this program. 
All of the provisions of the note and security instrument, except as herein provided, shall remain in full force and effect. Upon the breach of any provision of the Agreement, VHDA may terminate this Agreement and, at the option of VHDA, institute foreclosure proceedings according to the terms of the note and security instrument without regard to this instrument. 
If I can be of further assistance, please use the contact information listed below. 
Sincerely, XXXX XXXX XXXX VHDA, Senior Loss Mitigation XXXX XXXX ______________________________ _______________________________ VHDA Representative Date XXXX -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- - You must sign, date and return this Agreement Letter within XXXX ( XXXX ) business days from the date of this letter. 



VHDA has refused to recognize me as the Successor-in-Interest in violation of FHA XXXX XXXXXXXX and 12 CFR 1024.30 ( d ), and has failed to process an assumption or provide loss mitigation options without requiring a creditworthiness review, which is explicitly prohibited for non-credit qualifying assumptions by FHA rules. This directly contradicts HUD XXXX XXXX and FHA guidance on successor-in-interest protections Despite submitting all legally required documentation showing I am the Successor-in-Interest, VHDA has failed to treat me as the borrower in violation of 12 C.F.R. 1024.30 ( d ) and FHA Mortgagee XXXX XXXX. I am legally entitled to full borrower protections, loss mitigation review, assumption without requalification, and direct communication. VHDAs actions have delayed assistance, bypassed due process, and exposed me to foreclosure threats without legal standing. 

Furthermore, the loan was XXXX in a XXXX XXXX bankruptcy filed by XXXX XXXX XXXX, rendering any claim to enforce the promissory note void under 11 U.S.C. 524. VHDA continues to reference and demand compliance with a discharged debt and has failed to engage with me, XXXX XXXX XXXX, the current legal owner and recognized XXXX under 12 CFR 1024.30 ( d ). This failure also violates FHA Mortgagee Letter XXXX, which mandates servicing protections for SOIs. 

Date Issue Regulation/Statute XX/XX/XXXX Failure to acknowledge XXXX request 12 C.F.R. 1024.36 ( i ) XX/XX/XXXX Failure to provide written acknowledgment of complete application within XXXX business days 12 C.F.R. 1024.41 ( b ) ( 2 ) ( i ) ( B ) XX/XX/XXXX Failure to evaluate all available loss mitigation options 12 C.F.R. 1024.41 ( c ) XX/XX/XXXX XXXX written decision or appeal rights provided 12 C.F.R. 1024.41 ( d ), ( h ) Ongoing Contacting prior borrower, not current XXXX  12 C.F.R. 1024.35, 1024.36 XX/XX/XXXX Coercive XXXX deadline to accept trial modification or face foreclosure Reg X XXXX FHA XXXX XXXX Ongoing Misrepresentation of {$21000.00} arrearage without itemized breakdown RESPA 6 ( b ), CFPB guidance Summary of Violations : 12 CFR 1024.41 ( b ) ( 2 ) ( i ) ( B ) : Failure to acknowledge complete loss mitigation application in writing within 5 business days.

12 CFR 1024.30 ( d ) and FHA XXXX XXXX : Failure to recognize and extend protections to a confirmed Successor-in-Interest. 

12 CFR 1024.41 ( c ) ( 1 ) : Failure to consider all available loss mitigation options beyond the imposed trial modification.

12 CFR 1024.41 ( d ), ( h ) : Failure to provide a written decision and inform of appeal rights.

12 CFR 1024.35 : Continuing servicing errors, including improper party contact and ignoring submitted documents.

RESPA 6 ( b ) : Failure to provide a clear and itemized breakdown of arrears claimed. 



Supporting Documents : XXXX Divorce Decree awarding the property to me XXXX XXXX XXXX XXXX XXXXXXXX XXXX XXXX XXXXXXXX Assistance XXXX ( submitted XX/XX/XXXX ) VHDAs unilateral trial modification letter ( XX/XX/XXXX ) Proof of ignored or mishandled communications This is in addition to my previous CFPB complaint that vhda has ignored.

Company response to consumer: Closed with explanation