Consumer complaint received 2026-04-22 00:00:00
Product: Mortgage — FHA mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage — Delays in the application process
Company: Michigan Mutual, Inc.
State: MI

Complaint narrative:
I am writing in response to Michigan Mutuals recent statement regarding my complaint. I respectfully dispute several of their assertions and request a more thorough regulatory review of their handling of this matter, including potential violations of HUD 203 ( k ) program requirements and general servicing standards. First, Michigan Mutual continues to mischaracterize my position as a refusal to cooperate. This is inaccurate. I have declined to sign a Hold Harmless agreement because it would require me to waive my legal rights in an active dispute with XXXX XXXX. Requiring such a waiver as a condition for releasing funds raises serious concerns regarding fairness and compliance, particularly where the underlying debt is disputed. This matter has been ongoing since XX/XX/year>. Notably, Michigan Mutual did not request or attempt to obtain a detailed, itemized accounting of any alleged balance owed to XXXX XXXX until after formal complaints were filed. This delay reflects a lack of due diligence and raises questions regarding whether proper procedures were followed in administering and overseeing the renovation escrow. Additionally, Michigan Mutual continues to imply that XXXX XXXX has initiated legal action against me. This is incorrect. I initiated legal proceedings to recover funds for improperly completed work. I also attempted to initiate arbitration in accordance with the governing agreement ; however, XXXX XXXX failed to participate and effectively evaded the process. Supporting documentation of these efforts has already been provided. Michigan Mutuals direct communication with XXXX XXXX to obtain revised invoices and negotiate a reduced settlement is also concerning. I did not authorize this interaction, and it is inappropriate for the lender to attempt to facilitate or influence resolution of a disputed claimparticularly while legal proceedings are ongoing. Any determination of amounts owed should be resolved through proper legal or arbitration channels, not through unilateral coordination between the lender and contractor. Further, Michigan Mutual is attempting to compel payment for work that was not completed properly. This is precisely why I refused to sign the Hold Harmless agreement. I will not accept financial responsibility for defective or incomplete work, and any attempt to require such payment as a condition of closing out the project is unreasonable. With respect to the consultant, the issue is not merely the tone of communication but the failure to complete a required termination inspection that had already been paid for. Michigan Mutual did not take appropriate steps to ensure completion of this obligation, contributing to ongoing delays. While Michigan Mutual asserts that it retains authority over the funds as the DE lender, that authority does not extend to withholding funds indefinitely or imposing conditions that effectively force a borrower to resolve a disputed claim outside of due process. I have consulted with legal counsel, who has advised that the continued withholding of funds appears to be discretionary rather than legally required, raising concerns regarding whether this constitutes unreasonable or improper servicing conduct. Additionally, as of today, I have been informed that I am unable to proceed with a new refinance due to the lenders failure to release or properly resolve the status of these funds. This has now caused direct financial harm and further underscores the urgency of resolving this matter. Additionally, the failure to timely reconcile contractor payments, ensure proper permitting oversight, and facilitate completion of required inspections may indicate broader deficiencies in the administration of this renovation loan. To be clear, I am not refusing resolution. I am requesting that this matter be resolved through appropriate legal or arbitration channels, without coercive conditions that require waiver of my rights or payment of disputed amounts. Given the above, I respectfully request a formal review of Michigan Mutuals actions, including : The continued withholding of escrowed renovation funds The requirement of a Hold Harmless agreement under disputed conditions Their involvement in attempting to negotiate or substantiate a contractor claim without borrower authorization Delays and failures in oversight of the renovation process, including inspections and contractor compliance The resulting financial impact, including interference with my ability to refinance Please treat this as a formal escalation of my complaint. I am requesting appropriate corrective action and oversight to ensure this matter is resolved in accordance with applicable guidelines and regulations. Thank you for your attention to this matter. Sincerely, XXXX

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation