Consumer complaint received 2026-03-30 00:00:00
Product: Mortgage — VA mortgage
Issue: Trouble during payment process — Escrow, taxes, or insurance
Company: CMG Financial Services, Inc.
State: CA

Complaint narrative:
On XX/XX/XXXX, XXXX XXXX disbursed {$4000.00} from my escrow account to the XXXX XXXX XXXX XXXX Collector as part of a bulk tax payment. Because XXXX did not provide me confirmation, proof of payment, or any written notice that this disbursement had been made, and because the countys public records continued to show my tax installment as unpaid for more than ten days following Cenlars alleged payment, I was forced to pay the same {$4000.00} directly to XXXX XXXX on XX/XX/XXXX, to prevent delinquency and protect my VA-guaranteed property from lien risk XXXX On XX/XX/XXXX, I filed a formal CFPB complaint regarding this duplicate payment and XXXX failure to provide proof that its disbursement had been received and applied by the county. In XXXX XXXX XX/XX/XXXX response to CFPB XXXX XXXX. XXXX, CMG acknowledged that the county applied my personal payment first, that CMGs disbursement was therefore a duplicate, and that CMG had requested a refund from the county. CMG committed to running a new escrow analysis once the refund was received and stated the overage would be returned to me directly if one was present. My transaction history confirms that the tax refund was not posted to my escrow account until XX/XX/XXXX. This is 122 days after the original disbursement on XX/XX/XXXX, 71 days after I filed my CFPB complaint on XX/XX/XXXX, and 43 days after CMG issued its XX/XX/XXXX response in which it represented that a refund had already been requested. VIOLATION 1 : LACK OF URGENCY DESPITE ACTIVE REGULATORY COMPLAINT Despite the existence of an active CFPB complaint filed on XX/XX/XXXX, CMG and XXXX took no documented steps to expedite the return of the duplicate tax payment. The refund did not post until XX/XX/XXXX, which is 71 days after the complaint was filed and 43 days after CMGs own written response acknowledged the error and committed to resolving it. No interim updates were provided to me in writing during this period. No documentation was provided showing when the refund request was submitted to the county, what form it took, or what follow-up steps were taken to recover the funds. Under 12 C.F.R. Section 1024.35 ( e ) ( 1 ) ( i ) ( A ), upon receiving a Notice of Error, a servicer is required to correct the error and provide written notification of the correction. CMG acknowledged the error in its XX/XX/XXXX response but did not correct it for an additional 43 days and provided no written updates during that period. Under 38 C.F.R. Section 36.4350 ( a ) and ( e ), VA loan servicers are required to follow accepted industry standards and comply with RESPA. An unresolved 122-day escrow error affecting a deployed servicemembers VA-guaranteed property , with no documented urgency or follow-up, does not meet that standard. I am requesting that CMG provide the following documentation in writing : the date on which the refund request was formally submitted to XXXX XXXX XXXX or its tax vendor ; copies of all correspondence or submissions made to the county or the tax vendor in connection with the refund request ; and confirmation of the date the county or tax vendor transmitted the funds back to XXXX. VIOLATION XXXX : FAILURE TO PAY STATUTORY ESCROW INTEREST FOR THE FULL 122-DAY PERIOD Under California Civil Code Section 2954.8, a servicer holding funds in a borrowers escrow account is required to pay the borrower 2 % annual interest on those funds. CMG acknowledged in its XX/XX/XXXX response that California law requires it to pay escrow interest, citing this as the basis for the {$58.00} interest credit posted to my escrow account on XX/XX/XXXX. The {$4000.00} that XXXX disbursed from my escrow account on XX/XX/XXXX, was not returned to my account until XX/XX/XXXX, a period of 122 days. During those 122 days, those funds were absent from my escrow account. Whether the funds were held by XXXX XXXX, by XXXX tax vendor, or in transit, the effect on my escrow account was the same : {$4000.00} that should have been in my escrow account earning the statutory 2 % rate under California Civil Code Section 2954.8 was not there. At 2 % annually on {$4000.00}, the interest owed for 122 days is {$27.00}. CMG has not credited this amount. Given that CMG has already acknowledged the applicability of California Civil Code Section 2954.8 to my account and paid the XX/XX/XXXX interest credit on that basis, there is no principled basis for CMG to refuse to apply the same statute to the 122-day absence of {$4000.00} from my escrow account. I am requesting a credit of {$27.00} to my escrow account representing the full statutory interest owed for the period XX/XX/XXXX through XX/XX/XXXX. VIOLATION 3 : REFUND IMPROPERLY ABSORBED INTO ESCROW ACCOUNT WITHOUT OFFERING DIRECT PAYMENT In its XX/XX/XXXX response, CMG stated that upon receipt of the tax refund, it would run a new escrow analysis and that if an overage was present, any additional funds in the escrow account would be returned to me directly. CMG did not honor this commitment. My transaction history shows the {$4000.00} tax refund was posted to my escrow account on XX/XX/XXXX. Rather than being offered to me as a direct payment as CMG committed, the refund was absorbed into the escrow account and used as the basis for a new escrow analysis that recalculated my annual escrow obligation. This analysis treated the higher tax amount applicable for the 2025-2026 tax year as the basis for the new annual escrow requirement and established a new escrow debt spread over the year, effectively using my refunded funds to offset CMGs own recalculated escrow requirement without my consent and without offering me the direct refund CMG promised in writing. This conduct violates 12 C.F.R. Section 1024.17 ( f ) ( 2 ) ( i ), which provides that if a servicer determines at the time of an escrow analysis that the escrow account contains a surplus, the servicer must refund the surplus to the borrower within 30 days if the surplus exceeds one months escrow payment. My current monthly escrow payment is {$370.00}. The {$4000.00} refund exceeds that threshold by {$3700.00}. Under Regulation X, CMG was required to refund the surplus directly to me within 30 days of completing the escrow analysis, not absorb it into the account and use it to satisfy a recalculated annual escrow obligation. This conduct also violates California Civil Code Section 2954 ( a ), which governs authorized uses of impound account funds and limits a servicers ability to retain escrow funds beyond the amounts authorized for disbursement. Retaining a {$4000.00} refund and applying it to offset a newly calculated escrow obligation without my written consent is not an authorized use of those funds under that provision. Finally, CMGs XX/XX/XXXX written commitment to return any overage directly to me constitutes a binding representation. CMGs failure to honor that commitment, while simultaneously using my refunded funds to reduce an escrow balance it recalculated using higher tax figures for the new year, is inconsistent with the transparent and accurate escrow administration required under 12 C.F.R. Section 1024.17 ( i ) and 12 C.F.R. Section 1024.38 ( b ) ( 3 ).

Company response to consumer: Closed with explanation