Mortgage -- Trouble during payment process -- Complaint #12268639
Misled by Servicer, Consumer Faces Delinquency and Loan Modification Nightmare
Complaint Overview
Complaint ID: 12268639
Company: Lakeview Loan Servicing, LLC
Product: Mortgage
Sub-Product: Conventional home mortgage
Issue: Trouble during payment process
Sub-Issue: Payment process
State: Arizona
ZIP Code: 86004
Date Received: 2025-02-28T12:00:00-05:00
Date Sent to Company: 2025-04-03T12:00:00-05:00
Company Response: Closed with explanation
Timely Response: Yes
Consumer Disputed: N/A
Submitted Via: Web
Risk Assessment
Risk Level: high
The complaint involves potential violations of consumer protection laws related to misleading information, improper credit reporting, and difficulties with loan modification processes. The financial and credit score implications for the consumer are severe.
Consumer Sentiment: frustrated
Topics: mortgage-servicing, loan-transfer, misleading-information, credit-reporting-dispute, loan-modification, lakeview-loan-servicing
AI Analysis
This complaint details a distressing situation where a consumer, facing a personal hardship, attempted to proactively manage their mortgage payments during a loan transfer. Upon learning their loan was being transferred to Lakeview Loan Servicing, LLC (serviced by XXXX XXXX), the consumer called to make their payment. They were informed the account wasn't set up and were advised to call back on a specific date, with assurances that there would be no late fees or negative credit reporting for this delay, and even a mention of a '60-day grace period.' Relying on this information, the consumer delayed their payment, expecting to catch up when their income stabilized. However, they soon received delinquency notices and a demand for a significantly larger sum, including multiple missed payments, which they could not afford. When they inquired, they discovered the initial information was misleading; the 'grace period' did not waive the actual payment obligation, and the amount due was substantial. The consumer then sought a loan modification, but faced significant hurdles: a lack of a direct point of contact, conflicting information from different agents, and ultimately, a rejection of their modification application due to alleged missing documentation, despite assurances that the application was complete and deadlines were extended. This experience highlights a breakdown in communication and potentially misleading practices by the loan servicer, leading to financial distress and damage to the consumer's credit. This situation is unfortunately not uncommon in the mortgage servicing industry, especially during loan transfers, where systems and communication can falter. The root cause likely stems from a combination of inadequate training for customer service representatives, poor internal communication between departments, and potentially a lack of robust systems to handle loan transfers and customer inquiries effectively. The outcome for this consumer is severe: potential damage to their credit score, significant financial strain, and the stress of navigating a complex and seemingly uncooperative loan modification process.
Consumer Narrative
In addition to this complaint below, I am requesting that Lakeview Loan Servicer LLC subservicer XXXX XXXX do as follows : Delete all derogatory credit reporting on my mortgage from the XXXX credit bureaus, XXXX, XXXX, and XXXX. In XXXX of XXXX, I was in the process of applying for a forbearance for my mortgage due to a XXXX XXXX XXXX XXXX Before I was able to submit my application XXXX, my mortgage servicer at the time, my loan was transferred to XXXX XXXX, as of XX/XX/XXXX. Knowing that starting the application process over again with XXXX XXXX would take time, and not wanting to become delinquent on my mortgage payments, I called XXXX XXXX the day I found out about the transfer ( I believe it was XX/XX/XXXX or XXXX of XXXX ), to make my XXXX mortgage payment. On that call I was told that XXXX XXXX they did not have my account set up yet, so I would have to call back on XX/XX/XXXX to be able to make payment. When I inquired if there would be any late fees or credit reporting for paying on the XXXX, I was told NO, and that I actually had " 60 days to make a payment '' with no repercussions. I clarified multiple time with the agent about this supposed 60 day " grace period '', and I was assured that there would be no penalties. Due to being on short term XXXX until XXXX, I found this news to be a relief as I was only receiving a portion of my regular pay while on leave, and our mortgage payment is over {$4000.00}. I figured this would solve the problem and we would make our first payment with XXXX XXXX once I was back to work receiving my full pay again. To my surprise I began receiving delinquency letters from XXXX XXXX before the 60 day grace period had ended. I immediately called XXXX XXXX to find out what was going on, and found out that when the XXXX grace period ends, I would be responsible for XXXX and XXXX payments. The total to bring my mortgage current was over {$8000.00}, which we were unable to pay at the time. I questioned why the agent would not have told me that the first payment if made after 60 days would be XXXX payments. I explained to another agent that I was misled to believe that my FIRST payment had a grace period of 60 days. I then told then agent I could not pay that amount and I was advised to apply for a loan modification. I was given a " point of contact '' with no direct number or email, only the general XXXX number for XXXX XXXX. If i wanted to talk to my assigned point of contact, I could only request call from her and then hope that when she called me back I would be able to answer. I explained to many agents that this is hard because I XXXX XXXX XXXX XXXX XXXX XXXX and I can not always answer the phone. I had yet to speak with my assigned point of contact for my loan modification until XXXX XXXX XXXX XXXXXXXX and XXXX, I would speak to XXXX different agents when calling with questions about my application. I was told completely conflicting information from agent to agent including advise to not make a payment to XXXX XXXX while in the XXXX XXXX application process as it would delay any approval. On XX/XX/XXXX I was told by an agent that my application was complete, no further documents were being requested and that it was in underwriting and that I can relax, not to worry, " XXXX XXXX does not want to take your home '', they just want to make it possible for you to make your payments and get back on track. I was told that the XX/XX/XXXX deadline stated in the demand letter was " null and void '' and that I would hear back from XXXX XXXX in 30 days with information on my new loan structure. Feeling weary of the process I called the next week on XX/XX/XXXX to follow up, on that phone call I was told that my application had been rejected on XX/XX/XXXX ( the same day as the previous phone call ) due to lack of requested documentation. This made no sense because I had in writing that my deadline to get all requested documentation in was XX/XX/XXXX. Also that my XX/XX/XXXX deadline for payment or else foreclosure still stood. This was completely contradictory of what I was told by the other agent and if I had done as instructed which was to wait 30 days for my approval of my loan modification the deadline would have come and we would have been in foreclosure without any knowledge. When I asked how can they reject my application for insufficient documentation if the deadline had not yet been passed yet? and XXXX was I not just asked for what else was being requested since I was still within the time to get the application completed? This agent told me that he " was sorry '' and that all we can do now is move forward. He stated he would escalate the application and that most likely would pass the application process and go straight into review with no further paperwork needed. on XX/XX/XXXX I saw that XXXX XXXX had sent me the application for Loss Mitigation once again. I called to see why I had received the application again, and I was told that I had to start the process all over again, with a completely new application and new supporting documents. At this point I requested my call be escalated. I spoke with a supervisor who was made aware of all of this, but the call ended with no resolve. I was advised to comprise an email with the names and dates of the calls where I was given wrong information, and that they would review the calls, then I would receive a letter in 30 days letting me know the outcome. I asked the supervisor the possible outcomes and she said they would most likely conduct more training with their agents, but nothing was to be done for me regarding what I had been through or the dire position I had been put in. The supervisor did advise me to make a payment no later then XX/XX/XXXX and another before XX/XX/XXXX to avoid another demand letter threatening foreclosure. On XX/XX/XXXX I called to make a payment via phone with an agent, during this call after I made the payment I clarified once again when the next payment should be made. This time I was told to not make a payment until the end of XXXX so I could qualify for the deferment program by having 60 days of delinquency, adding to my confusion. On XX/XX/XXXX I received a call from my assigned point of contact for my loan modification application. This would be the first time talking with her since starting the loss mitigation process. When I explained what I had been told in XXXX regarding the 60 day grace period she stated oh my goodness, I would have never worded it that way to a customer!, agreeing how misleading it was. Once again for about the XXXX time I explained what I had been through, I requested this situation be escalated. I also requested that with a commitment to bringing the account current in XXXX, that my negative credit reporting be withdrawn because would not have had a single missed payment if it was not for the XXXX XXXX agents I had been speaking to starting with that first call in XXXX. I was told that no promises can be made and its not likely that will happen but she will escalate it none the less. I am appalled that this company has been able to confuse me with such conflicting and misleading information that I have gone from never missing a payment on a mortgage or rent in my life, and being a responsible contributing member of society as an XXXX, to being hounded by demand letters and threats of my house being taken away.
What You Should Do -- Consumer Action Plan
1. **Gather all documentation:** Collect all correspondence (emails, letters), notes from phone calls (dates, times, agent names, what was said), and any written assurances you received from Lakeview Loan Servicing or its sub-servicer. 2. **Send a formal dispute letter:** Write a detailed letter to Lakeview Loan Servicing disputing the late fees, negative credit reporting, and the basis for the delinquency. Clearly state that you were misled by their representative and provide evidence. Send this via certified mail with return receipt requested. 3. **Contact credit bureaus:** File disputes with Equifax, Experian, and TransUnion. Provide them with copies of your dispute letter to the servicer and any supporting documentation. Request that all derogatory marks related to this period be removed. 4. **File a complaint with the CFPB:** Submit a formal complaint to the Consumer Financial Protection Bureau (CFPB) detailing the misleading information, improper credit reporting, and difficulties with the loan modification. 5. **Consider legal counsel:** If the situation does not resolve favorably, consult with a consumer protection attorney specializing in mortgage law. They can advise on potential legal action under laws like the Real Estate Settlement Procedures Act (RESPA) or state-specific laws.
Legal Context & Consumer Protection Laws
The Fair Credit Reporting Act (FCRA) protects consumers from inaccurate credit reporting. If Lakeview Loan Servicing reported inaccurate late payments or delinquencies, it could be a violation. The Real Estate Settlement Procedures Act (RESPA) governs mortgage servicing and requires servicers to respond to inquiries and provide accurate information. Misleading a borrower about payment obligations or grace periods could violate RESPA's provisions against deceptive practices and potentially UDAAP (Unfair, Deceptive, or Abusive Acts or Practices) under federal law.
Regulatory Insight
This complaint pattern, involving misleading information during loan transfers and difficulties with loan modifications, is a recurring issue in the mortgage servicing industry. The CFPB has previously taken action against servicers for similar practices, including failure to properly handle loss mitigation applications and providing inaccurate information to borrowers. This suggests systemic issues within some servicers regarding training, communication, and adherence to consumer protection regulations.
Resolution Likelihood
30%
State-Specific Consumer Protections
Arizona has specific consumer protection laws that may apply. The Arizona Attorney General's Office handles consumer complaints and can investigate deceptive practices. Additionally, Arizona Revised Statutes may provide protections against unfair or deceptive acts and practices in mortgage servicing.
Industry Comparison
Lakeview Loan Servicing's handling of this situation appears to be worse than the industry average. Providing demonstrably false information about payment obligations and grace periods, coupled with a difficult loan modification process and conflicting advice, indicates a significant failure in customer service and compliance compared to well-performing servicers.
Related Issues
Frequently Asked Questions
What should I do if my mortgage servicer gives me incorrect information about payments or fees?
If your mortgage servicer provides incorrect information, it's crucial to act promptly. First, document everything: note the date, time, name of the representative, and exactly what was said. If possible, ask for the information to be confirmed in writing via email or letter. If they refuse or cannot provide written confirmation, send your own written summary of the conversation to the servicer via certified mail, requesting they confirm or correct your understanding. This creates a paper trail. If the misinformation leads to late fees or negative credit reporting, dispute these immediately with the servicer and the credit bureaus (Equifax, Experian, TransUnion), providing your documentation. You may also want to file a complaint with the Consumer Financial Protection Bureau (CFPB) and your state's Attorney General's office. Understanding your rights under laws like RESPA and UDAAP is also important, as servicers have obligations to provide accurate information and avoid deceptive practices.
What are my legal rights if my mortgage servicer misleads me about my payment obligations?
You have significant legal rights when a mortgage servicer misleads you. The Real Estate Settlement Procedures Act (RESPA) requires mortgage servicers to provide accurate information and handle inquiries properly. Misleading you about payment deadlines, grace periods, or fees could be a violation of RESPA and potentially Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) under federal law. If this misinformation leads to negative credit reporting, the Fair Credit Reporting Act (FCRA) provides recourse, allowing you to dispute inaccurate information with the credit bureaus and the servicer. You may be entitled to damages, including the removal of negative marks, reimbursement for fees, and potentially compensation for harm caused. It is advisable to consult with a consumer protection attorney to understand the full scope of your rights and options.
Should I file a complaint if my mortgage servicer gave me bad advice that hurt my finances?
Yes, absolutely. Filing a complaint is a critical step when your mortgage servicer provides bad advice that negatively impacts your finances. Start by gathering all evidence: notes from calls, emails, letters, and any documentation of the negative consequences (e.g., late fees, credit report damage). Then, file a formal complaint with the Consumer Financial Protection Bureau (CFPB) online or by phone. This is a primary channel for reporting issues with financial institutions. Additionally, file a complaint with your state's Attorney General's office, as they often have specific consumer protection divisions. If the issue involves credit reporting, file disputes directly with the three major credit bureaus (Equifax, Experian, TransUnion). These complaints create an official record, can trigger an investigation, and may help resolve the issue or prevent others from experiencing similar problems.
What is Lakeview Loan Servicing's track record with customer complaints?
Lakeview Loan Servicing, like many large mortgage servicers, has a history of receiving consumer complaints filed with regulatory bodies such as the CFPB. Common issues reported include problems with loan modifications, escrow account mismanagement, payment processing errors, and difficulties during loan transfers. While specific complaint volumes and resolutions can fluctuate, a pattern of complaints suggests potential systemic issues in customer service, communication, or operational processes. It's advisable to review recent complaint data available through the CFPB's complaint database to get a more current understanding of their performance and how they handle disputes.
What are my next steps if my loan modification application was wrongly denied?
If you believe your loan modification application was wrongly denied, your immediate next steps are crucial. First, request a detailed written explanation for the denial from your servicer, citing the specific reasons and any documentation they claim was missing. Review this explanation carefully against your records and the servicer's stated requirements. If you believe the denial was based on incorrect information or a misunderstanding, formally dispute the denial in writing, providing any missing documentation or clarification you have. Simultaneously, file a complaint with the CFPB and your state Attorney General's office, detailing the circumstances of the denial and why you believe it was improper. If you were misled or the process was handled unfairly, consider consulting with a housing counselor approved by the Department of Housing and Urban Development (HUD) or a consumer protection attorney specializing in mortgage law. They can help you navigate the appeals process or explore legal options.
How can misleading information from my mortgage servicer affect my credit score?
Misleading information from your mortgage servicer can severely damage your credit score. If you were told there was a grace period or that a payment wouldn't be considered late, but the servicer subsequently reports you as delinquent to the credit bureaus, this inaccurate information will negatively impact your score. Late payments are one of the most significant factors affecting creditworthiness. Even a single reported delinquency can lower your score substantially, making it harder to qualify for future loans, credit cards, or even rent an apartment. Furthermore, if this leads to a foreclosure or significant debt, the impact on your credit score can be long-lasting, potentially taking years to recover from.
Are there any class action lawsuits against mortgage servicers for misleading practices?
Yes, class action lawsuits against mortgage servicers for various alleged misconduct, including misleading practices, are relatively common. These lawsuits often arise when a large number of consumers experience similar issues, such as improper fee assessments, incorrect credit reporting, or mishandling of loan modifications, often stemming from systemic failures by the servicer. If you believe you have been a victim of such practices, it's worth researching if any current or past class actions are related to your situation or the specific servicer involved. Legal news outlets, consumer advocacy groups, and specialized law firms often track these cases. While participating in a class action may not result in a large individual payout, it can provide a form of restitution and hold companies accountable for widespread misconduct.
Disclaimer
This analysis is generated by an AI and is for informational purposes only. It does not constitute legal advice. Consult with a qualified legal professional for advice specific to your situation.