Consumer complaint received 2025-12-31 00:00:00
Product: Mortgage — VA mortgage
Issue: Trouble during payment process — Payment process
Company: NAVY FEDERAL CREDIT UNION
State: KY

Complaint narrative:
CFPB COMPLAINT Mortgage / Escrow / Force-Placed Insurance ( Lender-Placed Insurance ) Company Navy Federal Credit Union ( NFCU ) 1 ) SUMMARY OF COMPLAINT- This is not a duplicate complaint to XXXX. This is a complaint after Navy Federal took action to cancel Force Placed Insurance but had already corrupted the payment record and failed to correct. Today XX/XX/XXXX we tendered XX/XX/XXXX payment and despite our Teller receipts, NFCU said the XXXX payment had not been made since there were funds in suspense. We never authorized funds in suspense. 

Background. Navy Federal Credit Union placed force-placed insurance ( FPI ) on the mortgage even though there was no lapse in our homeowners insurance coverage. XXXX XXXX notified NFCU and NFCU cancelled the FPI effective its start date of XX/XX/XXXX. Despite cancelling, NFCU attempted to charge us the FPI premium, and without our authorization NFCU converted/misapplied our monthly mortgage payments to pay the disputed FPI. NFCU then claimed our payment was short, placed payments into suspense, treated us as delinquent, and escalated to pre-foreclosure / collection posture for a debt we disputed from the beginning, abinitio, nunc pro tunc. 
Although NFCU cancelled the FPI ab initio, NFCU never corrected the internal accounting and continues showing us as past due. NFCUs continuing accounting errors appear to be generating late fees and default status from NFCUs own misapplication. On XX/XX/XXXX, we tendered the payment marked for XX/XX/XXXX private.special.deposit.entrust. ; the NFCU Teller asserted a late fee was due-we disputed ; we tendered the late fee Under Protest ; and NFCU still claimed funds remained in suspense and applied the payment to a prior month. We have receipts showing timely payments. 


This conduct has harmed us, including stress, time loss, improper fees, and damage risk to our credit. I lost 6 hours having to drive to the NFCU Teller in XXXX XXXX  since the online portal said they were " experiencing technical difficulties and to try back later. '' I then collected proof of Navy Federal Credit Union 's failures. The largest failure is Board oversight and Internal Control failure, implicating the need for external oversight and enforcement.

2 ) KEY FACTS ( CHRONOLOGY ) 1. No lapse in coverage. We maintained continuous homeowners coverage with XXXX XXXX. There was no gap requiring FPI.

2. NFCU placed FPI anyway, and the FPI cost was nearly double the premium of the XXXX XXXX policy already in force. 

XXXX. XXXX XXXX notified NFCU. NFCU cancelled the FPI effective the same date it purported to begin ( effective XX/XX/XXXX for policy year XX/XX/XXXX, XXXX ; cancellation effective XX/XX/XXXX ). 

4. Despite cancellation, NFCU attempted to charge us the FPI premium. We disputed the charge. Navy Federal Credit Union never corrected its accounting records.

5. Unauthorized conversion / misapplication of payments. Without our consent, NFCU converted our mortgage payments to pay the disputed FPI. Our tendered funds were restricted/marked private.special.deposit.entrustand were intended for the monthly mortgage payment purpose only yet NFCU re-directed them and converted them without authorization.

6. Suspense + short claim. After converting the payment, NFCU then stated our mortgage payment was short and placed the payment into suspense, claiming delinquency created by NFCUs own re-application.

7. Escalation despite dispute. We contested, disputed, and reported NFCU to regulators. NFCU nonetheless initiated pre-foreclosure / debt collection posture for amounts we dispute as invalid from inception. 

8. XX/XX/XXXX payment incident. We tendered full payment for XX/XX/XXXX ; NFCU asserted a late fee ; we paid the late fee under protest ; Teller then stated there was still an amount in suspense and that our payment was applied to XX/XX/XXXX. We objected. The payment was marked XX/XX/XXXX and we disputed the FPI and suspense treatment.

9. Ongoing accounting defect. The enclosed documents show NFCU cancelled the FPI but never corrected the internal ledger. NFCUs system continues to show delinquency even though our payments have been timely.

3 ) ADDITIONAL SERVICING MISCONDUCT : NO SINGLE POINT OF CONTACT + ROTATING ADDRESSES NFCU failed to provide a single, consistent point of contact for this dispute and escalated matter. NFCU also used multiple different states/addresses for communications and servicing ( including XXXXXXXX XXXX and XXXX XXXX  ) without our consent and without identifying a single accountable office or authorized agent.

We demand a SINGLE POINT OF CONTACT for all matters related to this mortgage dispute : one named person, with title, direct phone/email, and one servicing address that is actually responsible. 
This fragmented structure has the practical effect of : obstructing dispute resolution, enabling inconsistent representations, making it difficult to correct errors, and insulating NFCU from accountability while fees/delinquency continue, but opening the mortgage to cancelation, ab initio , nunc pro tunc.

4 ) WHY WE ARE COMPLAINING We are not asking CFPB to accept legal conclusions. We are reporting servicing conduct that appears unfair and harmful and has caused us actual harm.

FPI was placed when it was not needed ( no lapse ).

FPI was priced far above our existing coverage cost.

NFCU attempted to charge us anyway even after cancellation.

NFCU misapplied payments without authorization, then blamed us for short payments.

NFCU used suspense in a way that created artificial delinquency.

NFCU escalated to default/collection posture based on an internally created error.

NFCU has not corrected the account, and late fees/delinquency effects continue.

NFCU used federal Wire and federal US Mail in the scheme.

5 ) RETALIATION / DE-BANKING CONCERN After we reported NFCU to regulators ( NCUA/CFPB ) and disputed the charges, NFCUs continuing posture has the practical effect of punishing us for reporting ( continued delinquency coding, suspense balances, fee generation, escalation posture ). We ask CFPB to treat retaliation risk seriously and require NFCU to correct the record promptly, issue us an apology and send notice to its XXXX branch of gross errors and tell the XXXX branch to similarly issue an apology for maintaining that we still owed nearly {$670.00} XXXX ) DOCUMENTS WE ARE UPLOADING Force-placed insurance declarations and cancellation documentation ( showing cancellation effective XX/XX/XXXX ). 
XX/XX/XXXX payment slip/receipt. CFPB has the prior months slips in our prior filing. 
Prior NFCU notices alleging missed/short payment tied to the FPI and suspense.

7 ) REMEDY We request CFPB require NFCU to : 1. Correct the servicing ledger so the account reflects no delinquency caused by FPI placement/misapplication and suspense handling.

2. Remove and refund all fees, late charges, and amounts tied to the FPI and any suspense-created short condition.

3. Provide a complete, itemized payment history showing how each payment was applied ( principal/interest/escrow/fees/suspense ) and the exact dates the FPI was added/removed.

4. Provide written confirmation that the mortgage is current ( or an itemized explanation supported by evidence if NFCU claims otherwise ).

5. Correct any negative credit furnishing attributable to this dispute and provide written confirmation of corrections.

6. Stop all collection/default escalation tied to the disputed and internally created amounts.

7. Provide a single point of contact with direct contact details and one accountable servicing address.

8. Provide a written explanation of how controls failed such that FPI was placed without a lapse and the ledger was not corrected after cancellation.

9. Notify all credit reporting agencies that Navy Federal Credit Union admitted that it created an incorrect narrative and for all credit agencies to correct the record removing all adverse credit remarks concerning us.

10. Provide us with the face value of the Bond, profits and proceeds backing the FPI using our NAME. We CLAIM the Bond as NOT ABANDONED.

We also request CFPB review NFCUs practices for broader consumer harm, given the seriousness of force-placed insurance misuse and internal accounting failures.

We request CFPB to reimplement the {$95.00} million in penalties against Navy Federal Credit Union for its questionable practices.

We request CFPB referral to NCUA and US DOJ as appropriate and to OCC as appropriate.

8 ) NOTICE TO NFCU GOVERNANCE ( BOARD + SUPERVISORY COMMITTEE ) This complaint also serves as formal notice to NFCUs governance bodies that the conduct described reflects a breakdown in servicing controls and oversight. We request governance-level intervention to ensure immediate correction, refunds, and cessation of escalation.

NOTICE TO AGENT IS NOTICE TO PRINCIPAL. NOTICE TO PRINCIPAL IS NOTICE TO AGENT, SUCCESSOR, ASSIGNS.

BOARD OF DIRECTORS NOTICE ( INDIVIDUAL + OFFICIAL CAPACITY ) Each of the following is noticed in their individual capacity and official capacity as a Director/officer of NFCU : XXXX. XXXX XXXX XXXX XXXX XXXX. XXXX, Board of Directors 2. CAPT XXXX XXXX XXXX XXXX, XXXX ( XXXX. ) XXXX XXXX XXXX, XXXX of Directors XXXX. XXXX XXXX XXXX XXXX, XXXX ( XXXX. ) Second Vice Chair, Board of Directors 4. XXXX XXXX XXXX XXXX XXXX XXXX & XXXX ; Director/Treasurer XXXX. XXXX XXXX XXXX XXXX XXXX XXXX. XXXX XXXX XXXX. XXXX, XXXX ( XXXX. ) XXXX XXXX. XXXX XXXX XXXX XXXX, XXXX ( XXXX. ) XXXX XXXX. XXXX XXXX XXXX XXXX, XXXX ( XXXX. ) XXXX XXXX. XXXX XXXX XXXX XXXX XXXX Governance Demand : Direct management to correct the ledger, refund improper charges/fees, stop escalation, correct any credit reporting impacts, and assign a single point of contact. Provide us with the face value of the Bond, profits and proceeds backing the FPI using our NAME. We CLAIM the Bond as NOT ABANDONED.

SUPERVISORY COMMITTEE NOTICE ( INDIVIDUAL + OFFICIAL CAPACITY ) Each of the following is noticed in their individual capacity and official capacity as a member of NFCUs Supervisory Committee : 1. BGen XXXX XXXX XXXX, XXXX ( XXXX. ) XXXX, XXXX XXXX XXXX. XXXX XXXX XXXX XXXX XXXX, XXXX XXXX XXXX Member XXXX. XXXX XXXX XXXX XXXX XXXX, XXXX XXXX XXXX Member XXXX. XXXX XXXX XXXX XXXX, SC, XXXX ( XXXX. ) XXXX XXXX XXXX XXXX. XXXX XXXX XXXX XXXX, XXXX ( XXXX. ) XXXX XXXX Member Oversight Demand : Review and report on internal controls that allowed : ( a ) FPI placement without lapse ; ( b ) payment conversion without authorization ; ( c ) suspense creating artificial delinquency ; ( d ) failure to unwind/correct after cancellation ; ( XXXX ) escalation posture based on disputed, internally created amounts, and ( f ) receipt of our novation cancelling the mortgage for misrepresentation/concealment/ non full disclosure, ab initio 9 ) SINGLE POINT OF CONTACT DEMAND ( REPEAT FOR CLARITY ) We demand NFCU designate ONE accountable SPOC for all matters related to this mortgage dispute, with : name + title, direct phone/email, one responsible physical mailing address, written confirmation of authority to resolve the dispute and correct the ledger.

Until NFCU provides a SPOC and corrects the ledger, we dispute any claimed delinquency and object to collection/default escalation based on amounts created by NFCUs own misapplication.

10 ) TIME LOSS / OUT-OF-POCKET IMPACT On XX/XX/XXXX, NFCUs errors and refusal to resolve the ledger required approximately 6 hours of time to address. Our published fee schedule applies ; we assess {$3000.00} for that days time loss ( $ XXXX XXXX ), paid/owed due to NFCU-caused administrative burden. This is separate from fee refunds and credit correction.

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