Consumer complaint received 2026-03-30 00:00:00
Product: Mortgage — VA mortgage
Issue: Trouble during payment process — Trying to communicate with the company to fix an issue while managing or servicing your loan
Company: CMG Financial Services, Inc.
State: CA

Complaint narrative:
I am filing this complaint against CMG Financial and its subservicer XXXX XXXX regarding the improper handling of a principal-only curtailment payment submitted on XX/XX/year>, in connection with my VA-guaranteed mortgage XXXX, FACTS On XX/XX/year>, I submitted a principal-only curtailment of {$3000.00} through the XXXX XXXX borrower portal. The payment posted with an effective date of XX/XX/year>, as confirmed by my transaction history. On XX/XX/year>, XXXX reversed the payment, coding it as Misapplied Funds, and placed the {$3000.00} along with {$310.00} in escrow funds into a suspense account, resulting in a total suspense balance of {$3300.00}. No explanation for the reversal was provided to me in writing at that time. The {$3000.00} principal curtailment sat in the suspense account from XX/XX/XXXX through XX/XX/year>, a period of XXXX days. During this entire period, my principal balance remained {$3000.00} higher than it should have been, and interest continued to accrue on that inflated balance. On XX/XX/year>, XXXX reapplied the curtailment. However, rather than restoring the original effective date of XX/XX/year>, XXXX assigned an effective date of XX/XX/year>. This means I received no principal reduction credit for the period from XX/XX/XXXX through XX/XX/XXXX, and I received no credit for the XXXX days the payment sat in suspense. In total, the correct effective date was denied for XXXX days through no fault of my own. XXXX XXXX 's conduct violates XXXX C.F.R. Section XXXX ( b ) ( XXXX ) ( Regulation X ), which defines as a servicing error any failure to apply a payment to principal as directed by the borrower. My curtailment was explicitly directed to principal. Reversing it into suspense rather than applying it as directed is a Regulation X error regardless of the internal reason for the reversal. XXXX 's conduct also violates XXXX C.F.R. Section XXXX ( b ) ( XXXX ), which defines as an error any failure to credit a payment as of the date of receipt. My payment was received XX/XX/year>. It was not credited for XXXX days. Under XXXX C.F.R. Section XXXX ( k ) ( XXXX ), servicers are required to apply payments in a timely manner and credit them as of the date received. Holding a correctly submitted payment in suspense and then assigning a later effective date upon reapplication due to the servicer 's own internal error is a direct violation of this provision. This conduct also violates XXXX C.F.R. Section XXXX, which grants VA borrowers the unconditional right to make principal prepayments at any time without penalty or fee. Denying me XXXX days of accrual benefit through an improper suspense hold and effective date shift is functionally a penalty on my prepayment in violation of that federally protected right. Under XXXX C.F.R. Section XXXX and VA XXXX XXXX XXXX, upon receipt of a principal curtailment, the servicer is required to recast the loan amortization schedule to reflect the reduced principal balance. Because XXXX held the payment in suspense, no recast was performed as of XX/XX/year>. Every payment processed after that date was calculated against a principal balance approximately {$3000.00} higher than it should have been. At my implied note rate of approximately 5.0 %, this resulted in overstated interest charges of approximately {$12.00} per monthly payment for every month the inflated balance was used as the basis for interest calculation. Finally, XXXX held {$3000.00} of my funds in a non-interest-bearing suspense account for XXXX days due to its own error. Under California XXXX XXXX XXXX XXXX, a 2 % annual interest obligation applies to borrower funds held by a servicer. The holding of these funds without compensation or timely application also raises concerns under XXXX XXXX. Section XXXX, which prohibits unfair acts or practices in XXXX XXXX XXXX. A practice is unfair when it causes substantial injury that the consumer can not reasonably avoid. I could not avoid this situation. XXXX created the error, XXXX made the reversal, and XXXX assigned the later effective date.

Company response to consumer: Closed with explanation