Consumer complaint received 2025-05-14 00:00:00
Product: Mortgage — FHA mortgage
Issue: Trouble during payment process — Escrow, taxes, or insurance
Company: Mr. Cooper Group Inc.
State: IN

Complaint narrative:
1. Unauthorized Interference Before Legally Servicing the Loan o On XX/XX/XXXX, Mr. Cooper interfered with my PREPAID XXXX insurance policy before they were legally servicing my loan. They contacted XXXX and initiated a forced insurance change by backdating a fabricated lapse in coverage. 
o This created a false justification to cancel my valid prepaid policy and force-place a more than double the premium. 
2. False Insurance Payment Entry & Cancellation Deception o A payment was falsely recorded as made on XX/XX/XXXXXXXX  ; the actual escrow deduction didnt occur until XX/XX/XXXX. 
o I was not informed of any cancellation. My policy was terminated and replaced without notification or consent, violating RESPA and state insurance regulations. 
3. Unauthorized Escrow Withdrawal & Overcharge for Forced Insurance o On XX/XX/XXXX, Mr. Cooper withdrew the entire annual premium {$1500.00} from escrow for forced insurance despite my XXXX policy being paid in full. 
o the policy they implemented ignored the available discounted rate of {$1300.00}, resulting in an overcharge of {$210.00}. 
4. Absorption and Misallocation of Prepaid Premiums o Seven months of prepaid XXXX coverage were never refunded to me or applied to my escrow account. 
o the remaining funds were silently applied to the new policy without disclosure, further constituting a conversion of funds. 
5. Reversal and Withholding of XXXX Escrow Transfer o My XXXX escrow balance in XX/XX/XXXX was {$1000.00}. By XX/XX/XXXX, Mr. Cooper showed only {$440.00} in escrow, with {$580.00} unaccounted for and no valid explanation. Also, they did a reversal of the funds transferred from XXXX. 
6. Fabricated Property Tax Charge and Lump-Sum Withdrawal o On XX/XX/XXXX, Mr. Cooper withdrew {$740.00} from escrow for taxes despite XXXX XXXX showing no property tax due. 
o No payee, parcel ID, or confirmation was provided. They scheduled another charge for XX/XX/XXXX, doubling the fraud. 
o Instead of spreading this alleged tax cost over 12 months as required under standard escrow practices, they made a single lump-sum withdrawal, thereby triggering an immediate and artificial shortage in my account. 
7. Forced Full-Year Charges & False Shortage Setup o Mr. Cooper charged my escrow for full-year premiums for both tax and insurance without my consent.

o Instead of spreading costs monthly, they made lump-sum deductions, creating a false escrow shortage and triggering payment increases. 
8. Violation of RESPA 2605 ( f ) ( 3 ) and TILA 1639 o Mr. Cooper withheld transferred escrow funds for more than 60 days and misrepresented escrow obligations.

o They withheld well beyond the permitted window and withheld significantly more than 60 days worth of escrow, withholding thousands in funds while reporting false shortages. 
o These actions directly violate RESPA, TILA, and HUD/FHA administrative servicing requirements.

9. Exploitation of Disabled Borrower in Violation of ADA and ECOA o Mr. Cooper knowingly targeted me, a disabled borrower, with abusive practices. 
o This exacerbated my condition and created discriminatory financial pressure, violating ADA and ECOA protections.

10. Suspicious Fire Sale Transfer to XXXX XXXX Amid Ongoing Liability On XX/XX/XXXX, XXXX XXXX  announced a {$9.00} XXXX acquisition of Mr. Cooper. In reality, Mr. Cooper actively transferred my loan to XXXX during the height of unresolved misconduct and liability exposure. This transaction resembles a calculated fire sale, wherein tainted and legally compromised loans, like mine, were offloaded to another entity to sidestep accountability for systematic. 
If this fraudulent pattern occurred in my account, it is highly probable that other borrowers were similarly exploited and transferred without full disclosure, making this not only a personal violation but potentially a broader consumer protection and regulatory crisis. 
11. Fraudulent Retention of Canceled Insurance Premium Post-Policy Termination On or about XXXX XXXX XXXX  I formally canceled the forced-placed XXXX Insurance policy ( premium : {$1500.00} ), which Mr. Cooper had fraudulently applied. Despite this cancellation, Mr. Coopers most recent escrow analysis continues to treat the policy as active, listing a future installment due XX/XX/XXXX. This constitutes a willful misrepresentation of my escrow obligations and ongoing escrow fraud, designed to justify future shortages and payment increases. 
12. Unauthorized Application of Funds Toward Foremost Insurance Policy After I canceled the forced-placed XXXX policy , I obtained a new policy through Foremost Insurance with an annual premium of {$910.00}. Mr. Cooper then withdrew these funds from my escrow account without my consent or knowledge and withdrew the fill annual premium creating a negative balance in my escrow. 
This unauthorized withdrawal forced my escrow account into a negative balance and reflects continued manipulation and unlawful servicing activity in direct violation of RESPA and FHA escrow handling rules. 
Mr. Cooper again failed to spread this cost over monthly installments, further destabilizing my escrow balance. 
A new escrow analysis has already been scheduled for XX/XX/XXXX, setting up another fabricated shortage to justify additional payment increases. 
This pattern of sudden full withdrawals, concealed billing, and future analysis manipulation demonstrates that these are not isolated errors but part of a calculated servicing scheme. 
Additionally, the use of electronic systemsincluding online mortgage portals, wire transfers of escrow funds, internal servicing platforms, and automated policy switching toolsestablishes probable cause for wire fraud under 18 U.S.C. 1343 and potential digital fraud through misrepresentation of financial data and electronic records. The fraudulent transmissions of escrow balances, backdated insurance records, manipulated tax disbursements, and digital suppression of borrower notifications all meet the criteria for financial fraud committed through interstate systems and digital infrastructure.

14. Premeditated and Engineered Foreclosure Scheme The cumulative actions described throughout this declaration were not accidental nor negligentthey represent a premeditated effort to push this loan into default and seize the property through engineered foreclosure.

Mr. Coopers actions targeted a historically significant family home passed down from my grandmother, which has been in our family since XXXX. 
The servicer 's pattern of false shortages, escrow theft, unauthorized charges, and misrepresentations was designed to destabilize my finances and manufacture delinquency, enabling them to claim the property and profit through FHA insurance recovery illegally. 
This constitutes an egregious abuse of the FHA servicing platform and a direct attack on intergenerational wealth in violation of federal law and public trust. 
There are SEVERAL complaints on the XXXX  website against XXXX XXXX which is a subsidiary of Mr. Cooper. It is to my knowledge that Mr. Cooper is the company actually servicing my loan. Also, I am a XXXX borrower on a fixed income.Immediate cancellation of the FHA-insured mortgage loan.

This unscrupulous company has engineered a fraudulent scheme to illegally foreclose on hard working American 's and American 's who are on a fixed income property. My house was left to me by my Grandmother and has been in my family since XXXX! 
Full lien release Refund of all escrow funds misapplied or stolen Reimbursement for legal fees, emotional distress, and statutory damages Post-cancellation compensation of no less than {$100000.00} This demand reflects direct financial harm, ADA/ECOA violations, emotional distress as a disabled borrower, fraudulent escrow manipulation, and systematic deception carried out by Mr. Cooper and Lakeview Loan Servicing . 

I am also requesting that the CFPB : Launch a full investigation into Mr. Cooper, Lakeview, and XXXX XXXX  for systemic servicing abuse Refer this case to HUD and the U.S. Department of Justice for potential RICO, wire fraud, and civil rights violations Lastly, I want my experience to serve as a warning to otherswhat happened to me is likely happening to many. I urge CFPB to publish my account ( anonymized ) on consumerfinance.gov so others can avoid similar harm.

Company response to consumer: Closed with explanation