Consumer complaint received 2026-07-03 00:00:00
Product: Mortgage — Home equity loan or line of credit (HELOC)
Issue: Struggling to pay mortgage — Applying for or obtaining a modification, forbearance plan, short sale, or deed-in-lieu
Company: PENTAGON FEDERAL CREDIT UNION
State: GA

Complaint narrative:
RE : Unfair, Deceptive, and Abusive Acts or Practices ( UDAAP ) Servicer advanced a curable {$870.00} default to a {$130000.00} accelerated foreclosure without notice, caused the cancellation of my homeowners insurance, and failed to conduct a reasonable fraud investigation. XXXX XXXX XXXX XXXX XXXX Executive Summary PenFed services my home equity line of credit ( HELOC ). In XX/XX/XXXX, PenFed confirmed in writing that I could cure my default for {$870.00}. This default was the direct result of a documented identity-theft account freeze. Rather than work with me to cure this minor delinquency, PenFed engaged in a series of predatory and unreasonable practices : - Accelerated the entire {$130000.00} balance and advanced foreclosure without prior notification. - Attempted to seize a home over a curable {$870.00} delinquency XXXX XXXX an amount representing a fraction of one percent of the propertys estimated value XXXX XXXX despite my holding over {$500000.00} in equity. PenFed 's collateral is perfectly secure, making this rush to foreclose deeply predatory and unnecessary. - Charged undisclosed foreclosure costs and concealed an appraisal billed to my account. - Prematurely notified my insurer of the foreclosure, causing my homeowners policy to be canceled. - Denied my fraud dispute using the very payment failure the fraud caused. - Continued aggressive foreclosure proceedings while simultaneously admitting an open fraud investigation remains unresolved. Because PenFed holds more than {$10.00} XXXX in assets, it is subject to direct CFPB supervision. I am requesting immediate intervention to halt this disproportionate and punitive foreclosure. XXXX XXXX XXXX Documented Chronology XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX I reported an identity-theft account takeover. My XXXX XXXX account was frozen as a protective measure. XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX My PenFed mortgage auto-payment of {$730.00} was returned by XXXX with reason code XXXX ( account frozen ). XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX PenFed sent a delinquency notice stating the amount to cure was {$870.00}. XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX PenFed unilaterally froze my HELOC, blocking my ability to draw against my own line to cure the arrears. XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX PenFed charged my account {$330.00} for an appraisal and {$290.00} in title costs without notifying me that foreclosure had begun. XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX I formally notified PenFed in writing of the fraud on this account. XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX PenFed sent an " Urgent Notification of Foreclosure '' to my insurer, XXXX, XXXX weeks before notifying me. XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX PenFeds counsel demanded the fully accelerated balance of {$130000.00}. XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX I learned of the foreclosure by accident via an internal PenFed email. That same day, PenFed officially acknowledged my fraud report, opened an investigation, but refused to provide the appraisal or fraud-investigation file. XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXXXXXX issued a Notice of Cancellation of my homeowners policy, citing PenFed 's foreclosure notice as a " substantial change in risk. '' XXXX XXXX XXXX Core Regulatory and Procedural Violations XXXX XXXX XXXX Unfair, Deceptive, and Abusive Acts or Practices ( UDAAP ) XXXX XXXX PenFed accelerated a curable {$870.00} delinquency into a {$130000.00} foreclosure. To put this in perspective, PenFed is attempting to seize a home over a missed payment that equals XXXX XXXX XXXXess than a fraction of one percent of the property 's estimated value XXXX XXXX, despite my having over {$500000.00} in equity. The missed payments were strictly due to my liquid funds being frozen following identity theft. PenFed then compounded this harm by freezing my HELOC, cutting off my ability to draw funds to cure the default, and ruining my credit, which blocked external refinancing. Creating a scenario where a borrower is trapped in a default they have the net worth to cure is fundamentally unfair and abusive ( 12 U.S.C. 5531, 5536 ). XXXX XXXX XXXX FCRA Violation : Unreasonable Fraud Investigation XXXX XXXX Under the Fair Credit Reporting Act ( 15 U.S.C. 1681s-2 ( b ) ), furnishers must conduct a reasonable investigation into disputed information. PenFed initially denied my unauthorized-activity dispute because the XXXX payment " came back NSF. XXXX This NSF was caused by the XXXX XXXX freeze stemming from my identity theft. Using the consequence of the fraud as the sole reason to reject the fraud claim is circular and constitutes an unreasonable investigation. XXXX XXXX XXXX TILA / Regulation Z Violations : Undisclosed Fees and Concealed Records XXXX XXXX PenFed charged {$620.00} in foreclosure-related costs to my account before I had any notice that foreclosure had begun. Furthermore, PenFed commissioned an appraisal using my funds ( {$330.00} ) but has refused to disclose the results, dismissing my requests as " irrelevant, overbroad, or unduly burdensome. '' A servicer can not charge a borrower for property valuation records and then conceal those records, especially when the valuation proves that foreclosure is entirely unnecessary. XXXX XXXX XXXX. Severe Third-Party Harm and Insurance Interference XXXX XXXX PenFed communicated a foreclosure declaration to my insurer ( XXXX ) and my first-mortgage servicer ( RoundPoint ) two weeks before notifying me. This premature action resulted in the cancellation of my homeowners policy effective XX/XX/XXXX. PenFeds reckless communication is actively stripping my home of insurance, exposing me to costly force-placed coverage, and threatening to trigger a secondary foreclosure by my senior lienholder. XXXX XXXX XXXX Contradictory Internal Recordkeeping and Dual Tracking XXXX XXXX PenFed continues to advance foreclosure while simultaneously acknowledging in writing ( as of XX/XX/XXXX ) that the fraud investigation remains open. Furthermore, PenFed issued a Verification of Mortgage on XX/XX/XXXX, reflecting a normal monthly payment, no 120-day delinquency, and no foreclosure statusdirectly contradicting the demands sent by their legal counsel and their communications to XXXX.

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