Consumer complaint received 2023-05-23 00:00:00
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — 
Company: Mr. Cooper Group Inc.
State: MD

Complaint narrative:
I am a Mr. Cooper customer. My home has an 80 % loan-to-value and I've met every requirement for the PMI removal process ; however, I have been presented with new requirements each of the three times I attempted to initiate the process, and there's no indication continuing to meet undocumented and not communicated requirements will end in Mr. Cooper approving my PMI removal. 

Some details about me : my account number is <account>. I have and will continue to always pay my loan on time. In fact, I make extra principal payments every month. My current principal balance is {$490000.00}, according to Mr. Cooper. My wife and I both have excellent credit ratings, were in stable and well-paying careers, and were both likely in the lowest customer risk category for defaulting on a loan or making late payments. In other words, there is very low risk where PMI applies. 

For some background about this request : we made significant improvements to our home after moving in. We opened the kitchen so now the main floor has an open floor plan, we installed a peninsula with granite countertop and large cabinets, we replaced the kitchen appliances with stainless steel, we replaced the flooring on the main and basement levels with luxury vinyl plank, and I installed a two-level paver patio with retaining wall and lighting for hosting guests. Along with the market value increases, we did some math and decided that we were close enough to the industry-standard 80 % LTV  that we would pay down our loan enough to have our PMI removed. We looked up on the Mr. Cooper website how to remove the PMI and found at the link below that we could request early PMI termination if our house had 20 % equity after doing an appraisal. I have have a screen capture of the website taken on XX/XX/XXXX at XXXXXXXX XXXX EDT documenting the requirements. 

https : //www.mrcooper.com/help-center/escrow/mortgage-insurance-pmi-mip So I initiated a conversation with Mr. Cooper about the requirements for requesting PMI removal. I had a conversation with XXXX, a Mr. Cooper representative, on XX/XX/XXXX at XXXXXXXX XXXX EDT, where she outlined possible ways to initiate the PMI removal process. She was very helpful with my questions ; in particular, this line of questions : Me : If I were to pay down the loan to 80 % loan to value, I could use the first path [ meaning the one ensured by the XXXX ]? 

XXXX : Correct! 

Me : My loan will be XXXX years old soon. After its XXXX years old, can I do an appraisal to determine the loan to value and pay it down to 80 %? 

XXXX : You absolutely can! You will contact us back at that time. 

I have screen captures of the conversation. 

So the path seemed very clear, agreed with the information on the Mr. Cooper PMI removal website, and in line with other lenders Ive discussed PMI removal with. We hired the XXXX, XXXX XXXX XXXX with XXXX XXXX XXXX, recommended by our realtor, XXXX XXXX XXXX, and he provided the appraisal I previously submitted to Mr. Cooper. For transparency, our house appraised for {$620000.00}, putting the LTV at 79.8 %. As XXXX requested, I initiated a second chat conversation to discuss starting the PMI removal process. 

Then came the first surprise : XXXX informed us the XXXX had to be approved by our investor, XXXX XXXX. This is something XXXX should have mentioned, but I did as XXXX recommended and sent the appraisal to XXXX with the subject line " To the PMI department : question about appraiser. I sent the email on XX/XX/XXXX at XXXXXXXX XXXX EDT. I also have screen captures of the second conversation with XXXX. 

I returned a phone call on XXXX XXXX from Mr. Cooper and was transferred to a PMI specialist in Arizona. Oddly, she said she reviewed the phone conversation ( not sure to which one she was referring ) to catch up on my request, but then mentioned that she didnt have access to the chat records. I found this strange because I hadnt talked to anyone on the phone about the PMI removal, so its likely this representative read the chat to understand the history. 

Then came the second surprise : this representative informed me that, because the loan was older than 2 years, the required LTV was 75 % instead of 80 %. 

It was clear to see where this was going. From an outside point of view, this new requirement was designed to prevent people in my situation from removing the PMI. Neither XXXX nor XXXX mentioned anything about 75 % if the loan is more than XXXX XXXX XXXX, and in fact, I specifically asked and XXXX confirmed that I could pay down my principal balance to achieve the required 80 % LTV after my loan was XXXX XXXX XXXX. If such a requirement as 75 % LTV after XXXX  years existed when I asked, theres no doubt XXXX, who was very knowledgable and the voice of Mr. Cooper as the representative, would have told me. It seemed designed intentionally to add enough friction to the process to deter your customers from completing it. 

So I sent a signed and dated letter with the above information, appraisal, and prints of the PMI removal information from the Mr. Cooper website to the Mr. Cooper office. XXXX XXXX received and signed for the letter on XXXX XX/XX/2023, but I never received any indication they were doing anything with my request. So I initiated another chat conversation on XXXX XXXX, which I have screen captures of, where XXXX informed me she started the PMI removal process for me after I told her I'd met all the requirements. She told me it would take 30-45 days for Mr. Cooper to determine if our XXXX was approved by XXXX XXXX XXXX 

I received a phone call on XXXX XXXX from Mr. Cooper where I was told a decision about PMI removal would be made in 1-2 days. I received a document in my Mr. Cooper account on XXXX XXXX indicating our request had been declined by Mr. Cooper for the following reason : " We reviewed your property to ensure the value had not declined from your origination valuation on a web based XXXX XXXX calculator that returned a value of {$610000.00}. 
This estimate of value was developed by an automated valuation model that was made available to your servicer by XXXX XXXX. This estimate of value is not the result of appraisal, nor was it developed by a state licensed or certified XXXX. '' Again, another surprise considering before this letter all that was required to determine value was an appraisal from an approved XXXX documenting all of the improvements that have been made to the property since its details were last made public in a real estate database -- which this automated XXXX XXXX  calculator could have no knowledge of. So now we've gone full circle back to paying down the loan to achieve a 80 % LTV, but there's on guarantee this will be enough for Mr. Cooper, as indicated by this part of the request denial : " Another option for cancelling PMI is to pay down your mortgage loan balance to achieve the needed loan to value ratio for PMI to be cancelled. If you are interested in this option, please contact us. Please be aware that the needed loan to value ratio is only one condition for cancellation. Other conditions, such as the loan must be in good standing, also apply. Our agents will explain these conditions to you if you call us for additional information regarding cancellation. '' We're now on 4 chat conversations, 2 phone conversations, and a letter with no clear indication I've met all the undocumented " other conditions '' almost certainly designed to deter people from successfully gaining approval to remove PMI from their mortgage account. It seems we wasted {$500.00} on an appraisal that was either unnecessary if Mr. Cooper was going to use their own tool anyways, or untrustworthy as a determination of value, even though it's from a licensed individual approved by my loan 's investor, XXXX XXXX. It's also possible this process is intentionally drawn out by Mr. Cooper to exceed the XXXX expiration timeline of the appraisal as an additional deterrent. It's hard to imagine legitimate business reasons for continuing to introduce new requirements every time they talk to their customers.

Company response to consumer: Closed with explanation