Consumer complaint received 2024-11-01 00:00:00
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — Escrow, taxes, or insurance
Company: LAKE MICHIGAN CREDIT UNION
State: MI

Complaint narrative:
Lake Michigan Credit Union ( LMCU ) incorrectly claimed that their Actual payment from escrow disbursement in XX/XX/XXXX was equal to their Projected payment from escrow disbursement in XX/XX/XXXX. 
LMCU then used this incorrectly documented Actual disbursement in projecting my XXXX escrow payments, as well as in calculating whether a surplus check needed to be issued at the end of XXXX. Had LMCU used the correct Actual payment in XX/XX/XXXX, LMCU would have made the correct XXXX projected payments, and realized that a surplus check should not have been issued in XXXX. The starting balance of my escrow account in XXXX was negative immediately after issuing a surplus check. Had they not issued the surplus check, the starting balance would have been positive. A simple audit would have revealed that something was wrong here, but they took no action and the incorrectly reduced escrow payments in XXXX amplified the problem that would arise in XXXX. 
I shared documentation with LMCU of my property tax history as well as LMCU 's own annual escrow account disclosure statement, which confirmed their mistake. Their initial response was dismissive, so I provided an extremely detailed explanation of the where their mistake was made and how it had a cascading effect on subsequent escrow payments. They have not yet responded to my follow-up. 
These compounding mistakes have led to LMCU issuing an escrow shortage payment of over {$500.00} per month through XXXX ( for a total of over {$6000.00} on the year ), above and beyond the regularly scheduled escrow payments. My property taxes only increased by {$3000.00} from XXXX to XXXX, and LMCU is projecting XXXX increase from XXXX to XXXX. It is their mistake that is leaving me with a significantly elevated tax burden to cover in XXXX year. They should not be dictating the terms on which I am required to fix their mistake. I am not arguing that I need to pay my property taxes ; I agree that I do. I am arguing that their mistake created an unnecessary financial burden on me in XXXX, and that the shortage payment should not be required to be paid back in full in XXXX year. LMCU should significantly extend the time frame over which the shortage payment is scheduled to be paid back, since it was their mistake that caused the need for a shortage payment in the first place.

I trusted that LMCU knew what they were doing in handling my escrow account, but I no longer trust them to make the correct projections so I will be auditing their disclosure statements myself going forward to ensure this mistake does not happen again. 
I am filing this complaint because this responsibility should not fall to the consumer, and I am deeply concerned that LMCU may be placing easily avoidable financial strain on their other customers who may not understand that LMCU is making this mistake.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation