The Valon Mortgage lawsuit currently on the federal docket is Graham et al v. Valon Mortgage, Inc. et al, a foreclosure and Truth in Lending Act case filed in May 2025 in Michigan. It is the only publicly documented federal suit against the servicer, but it sits alongside a much larger volume of borrower complaints alleging escrow errors, unwanted insurance charges, and unresolved account disputes.
The Graham Case in Federal Court
Jeff Graham, John Graham, Kenneth Graham, and Carol Graham filed suit on May 9, 2025, in the U.S. District Court for the Western District of Michigan. The case number is 1:25-cv-00545, and it names Valon Mortgage, Inc. and New Residential Mortgage, LLC as defendants.1PACER Monitor. Graham et al v. Valon Mortgage, Inc. et al
The docket classifies the case under real property foreclosure and the Truth in Lending Act. The specific factual allegations are not detailed in the public docket. Plaintiffs filed a second amended complaint in December 2025, and an early settlement conference held in April 2026 before Magistrate Judge Sally J. Berens did not resolve the dispute.1PACER Monitor. Graham et al v. Valon Mortgage, Inc. et al
As of mid-2026, the case is active but effectively paused. Attorney Valerie Moran moved in June 2026 to withdraw as counsel for plaintiff John Graham, with a hearing set for July 21, 2026. All other deadlines are stayed, and a previously scheduled scheduling conference was cancelled.1PACER Monitor. Graham et al v. Valon Mortgage, Inc. et al
No class action against Valon has been publicly filed, and no CFPB enforcement action against the company has been publicly documented.
What Borrowers Are Alleging
Valon’s Better Business Bureau profile shows 131 complaints filed over the past three years and an average customer review rating of 2.69 out of 5 across 245 reviews.2Better Business Bureau. Valon Mortgage Inc – Complaints3Better Business Bureau. Valon Mortgage Inc – Customer Reviews The complaints cluster around a few recurring issues.
Escrow Increases and Missed Tax Payments
Borrowers say Valon sharply raised monthly escrow payments based on tax calculations they contend were wrong. One borrower reported in early 2026 that their escrow requirement jumped from $380 to $1,120 per month. Another said an escrow analysis pushed their payment from $399 to $621, producing what the borrower described as a nearly $3,800 year-end surplus in an account that only handled about $5,500 annually.3Better Business Bureau. Valon Mortgage Inc – Customer Reviews
Other homeowners have reported delinquent property tax notices after Valon allegedly failed to pay bills on time while refusing to let the borrower pay taxes directly. In at least one documented case, Valon acknowledged a servicing system error involving an omitted tax parcel and reimbursed the borrower $319.90 for penalties.3Better Business Bureau. Valon Mortgage Inc – Customer Reviews
Escrow waiver denials have also drawn complaints. A February 2026 reviewer said Valon rejected their waiver request despite a 65% loan-to-value ratio, allegedly by using an inflated loan balance to calculate a 92% ratio instead.3Better Business Bureau. Valon Mortgage Inc – Customer Reviews
Force-Placed Insurance Charges
Since 2023, borrowers have complained that Valon charged them for insurance policies they did not need or had already replaced with independent coverage. One consumer reported being billed for wind insurance after opting out and buying a separate policy elsewhere. Others alleged that Valon collected escrow funds for insurance premiums but never paid the insurance bills.3Better Business Bureau. Valon Mortgage Inc – Customer Reviews
If proven, those practices could implicate the Real Estate Settlement Procedures Act, which requires accurate servicing disclosures and prohibits unauthorized fees. No court has ruled on force-placed insurance claims against Valon, and no settlements or enforcement actions on that theory have been publicly reported.
Payoff, Modification, and Service Complaints
Additional complaints cite Valon’s failure to honor requests for payoff statements, loan modifications, or mortgage assistance. Reviewers describe trouble reaching knowledgeable staff and receiving what they characterize as deflective or templated responses. Complaints also appear on the Consumer Financial Protection Bureau’s public complaint database.3Better Business Bureau. Valon Mortgage Inc – Customer Reviews
How the Carrington Sale Affects Borrowers
In May 2026, Valon announced a deal to sell its mortgage servicing business to Carrington Mortgage Services. The transaction covers approximately 800,000 loans with a combined unpaid principal balance of about $197 billion, much of it subserviced for other lenders.4HousingWire. Carrington Buys Valon Mortgage5National Mortgage Professional. Carrington, Valon Strike Government Servicing Deal The sale is expected to close in the third quarter of 2026.6Morrison Foerster. MoFo Advises Valon on Sale
If your loan is serviced by Valon, servicing will transfer to Carrington after closing. The public announcements have not detailed how the transition will affect individual accounts, payment processes, or pending disputes. Borrowers with unresolved escrow, insurance, or modification issues should document those disputes in writing before the transfer and keep records of every payment, statement, and communication so nothing is lost when the account moves.