Consumer complaint received 2026-02-05 00:00:00
Product: Mortgage — VA mortgage
Issue: Trouble during payment process — Escrow, taxes, or insurance
Company: CMG Financial Services, Inc.
State: CA

Complaint narrative:
I am submitting this complaint regarding improper insurance handling and unauthorized escrow disbursements by XXXX XXXX, the servicer for CMG Mortgage, on my VA-backed mortgage loan. According to XXXX written response, they disbursed a homeowners insurance payment of {$1500.00} to XXXX on XX/XX/year>. XXXX then states that they received a mid-term substitution from XXXX XXXX XXXX XXXX in XX/XX/year> and deducted an additional insurance premium from my escrow account based on that substitution. I did not authorize coverage through XXXX XXXX XXXX XXXX, I did not maintain any policy with that company, and I did not consent to any mid-term substitution. I have always maintained homeowners insurance through companies that actively support servicemembers, including XXXX, and have consistently chosen military-supportive insurers as an XXXX service member. 

The premium deducted in connection with XXXX XXXX XXXX XXXX totaled {$2200.00}. This amount represents an increase of {$610.00}, or approximately XXXX percent, over my existing XXXX insurance premium. This was a significant and unexplained increase over valid, active coverage that I already maintained, and it was imposed without notice, consent, or justification. 

I was not aware that XXXX had deducted escrow funds to pay or substitute insurance through XXXX XXXX XXXX XXXX until I formally filed a regulatory complaint regarding escrow mismanagement. Only after my complaint did XXXX acknowledge that the premium associated with XXXX XXXX XXXX XXXX was deducted in error and issue a reimbursement totaling {$2200.00}. XXXX admission confirms that the insurance charge was unauthorized and improperly imposed. The fact that this improper charge was neither disclosed nor corrected until after a formal complaint demonstrates a lack of transparency in escrow administration and deprived me of the ability to identify and dispute the issue in real time. 

Despite admitting that the insurance substitution and escrow deduction were erroneous, XXXX and CMG Mortgage continue to refuse to perform or provide a corrected escrow analysis reflecting the reversal of the improper insurance charge. The unauthorized insurance deduction materially impacted my escrow balance and contributed to escrow instability that XXXX has still not fully reconciled. Their refusal to conduct an escrow analysis following a known escrow error prevents me from verifying the accuracy of my account and violates escrow accounting requirements. 

XXXX conduct violates federal law, including 12 U.S.C. 2605 ( k ) ( 1 ) ( A ), which prohibits servicers from charging borrowers for services that are not authorized or not actually provided ; 12 C.F.R. 1024.37 ( a ), which prohibits imposing substitute or force-placed insurance when a borrower maintains required coverage ; and 12 C.F.R. 1024.37 ( b ) through ( d ), which require advance notices and an opportunity to cure before imposing substitute insurance. The improper deduction of escrow funds violates 12 C.F.R. 1024.17 ( k ) ( 1 ), and charging for unauthorized insurance constitutes a servicing error under 12 C.F.R. 1024.35 ( b ) ( 5 ). XXXX continued refusal to perform a corrected escrow analysis also violates 12 C.F.R. 1024.17 ( f ) and ( i ). 

XXXX actions further violate California Civil Code 2954.1, which requires accurate and lawful escrow administration, and California Business and Professions Code 17200, which prohibits unlawful and unfair business practices. Charging unauthorized insurance premiums that were nearly XXXX percent higher than my valid existing coverage, failing to disclose the improper substitution until after a complaint was filed, and refusing to provide a required escrow analysis constitute unlawful and unfair conduct under California law. 

At all relevant times, I was, and remain, on federal XXXX XXXX orders . As an active-duty servicemember, I intentionally maintain insurance coverage through companies that support military members, including XXXX. XXXX  improper substitution of insurance through a non-military-supportive insurer, its failure to disclose the charge until after a formal complaint, and its continued refusal to correct my escrow account after prior SCRA-related disputes creates a reasonable inference of retaliatory servicing conduct and disregard for military borrower protections. This conduct implicates the Servicemembers Civil Relief Act, the California Military Families Financial Relief Act, and the VA Servicer Handbook M26-4, all of which require heightened care, accuracy, and non-retaliation in servicing loans for XXXX servicemembers.

Company response to consumer: Closed with explanation