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Birdnests Caused by Flagging
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PROBLEM:
A matt of thread that piles up under the needle place is referred to as a "birdnest".  Birdnests can be caused by a variety of reasons. One in particular that's often overlooked is in the hooping.  If the fabric is not lying directly against the embroidery surface when hooped appropriately taut, this sets the stage for what is known as "flagging."  If the fabric is above the needle plate, the presser foot will push the fabric down and it bounces naturally back, causing an up and down motion that loosens the fabric within the hoop.  The loosened fabric will then cause the pull of the thread to contradict it's appropriate tension and loose stitching will acquire below the needle plate.

SOLUTION:
One thing to try is to invert the hoop:
After the item is hooped, slide the inner hoop slightly down until the hooped surface meets the sewing surface when you touch the fabric up to about an 1/8" recessed overlap.  (Invert just slightly on framing systems that attach to the pantograph on only one side.)  If this doesn't cure the problem, check the frame holding system and check for other reasons for the suspended hoop.

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