Consumer complaint received 2023-10-17
Company: Mr. Cooper Group Inc.
State: FL
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process
Sub-issue: Trying to communicate with the company to fix an issue while managing or servicing your loan

Complaint:
RightPath  Servicing has received numerous Notices of Error ( 16 ), this being the 17th notice via the CFPB portal and have refused to correct the errors, claiming no such errors occurred. RightPath Servicing seems to be under the impression that condominium insurance, providing coverage within the boundaries of the unit, can not exist without the words walls in and betterments and improvements, although neither of these terms are a requirement of XXXX XXXX or the CFPB, to meet the standard of proof of required coverage. Proof of the required unit interior insurance coverage has been provided to RightPath Servicing on multiple occasions. 

The Declaration for the condominium property ( XXXX  XXXX XXXX ) clearly explains the master insurance policy covers interior replacement cost for the entire condominium ( 100 % ), and states in the DECLARATION OF CONDOMINIUM FOR XXXX XXXXXXXX XXXX Section 14 INSURANCE ( 14.2a ) - The Association shall maintain insurance covering the following : Casualty - The Building including all fixtures, installations or additions comprising that part of the Building within the boundaries of the Units and required by the Act to be insured under the Associations policy ( ies ). 

This can also be described as all walls coverage. The condominium Association has never failed to provide the required coverage. 

The language found within the insurance policy provided to RightPath Servicing states : A. Coverage We will pay for direct physical loss of or damage to Covered Property at the premises described in the Declarations caused by or resulting from any Covered Cause of Loss. 
1. Covered Property Covered Property, as used in this Coverage Part, means the type of property described in this Section, A.1., and limited in A.2., Property Not Covered, if a Limit of Insurance is shown in the Declarations for that type of property. 
a. Building, meaning the building or structure described in the Declarations, including : ( b ) Materials, equipment, supplies, and temporary structures, on or within 100 feet of the described premises, used for making additions, alterations or repairs to the building or structure ; and ( 6 ) Any of the following types of property contained within a unit, regardless of ownership, if your Condominium Association Agreement requires you to insure it : ( a ) Fixtures, improvements and alterations that are a part of the building or structure ; and ( b ) Appliances, such as those used for refrigerating, ventilating, cooking, dishwashing, laundering, security or housekeeping.

But Building does not include personal property owned by, used by or in the care, custody or control of a unit-owner except for personal property listed in Paragraph A.1.a. ( 6 ) above. 
Your Business Personal Property located in or on the structure described in the Declarations or in the open ( or in a vehicle ) within 100 feet of the described premises, consisting of the following : ( 1 ) Personal property owned by you or owned indivisibly by all unit-owners ; ( 2 ) Your interest in the labor, materials or services furnished or arranged by you on personal property of others ; and ( 3 ) Leased personal property for which you have a contractual responsibility to insure, unless otherwise provided for under Personal Property Of Others. 
XXXX Page 1 of 15 ( 1 ) Completed additions ; ( 2 ) Fixtures, outside of including outdoor fixtures ; ( 3 ) Permanently installed : ( a ) Machinery and ( b ) Equipment ; individual units, ( 4 ) Personal property owned by you that is used to maintain or service the building or structure or its premises, including : ( a ) Fire extinguishing equipment ; ( b ) Outdoor furniture; ( c ) Floor coverings ; and ( d ) Appliances used for refrigerating, ventilating, cooking, dishwashing or laundering that are not contained within individual units ; ( 5 ) If not covered by other insurance : b. ( a ) Additions under construction, alterations and repairs to the building or structure ; But Your Business Personal Property does not include personal property owned only by a unit-owner Property Not Covered Covered Property does not include : n. Electronic data, except as provided under Additional Coverages, Electronic Data XXXX Electronic data means information, facts or computer programs stored as or on, created or used on, or transmitted to or from computer software ( including systems and applications software ), on hard or floppy disks, CD-ROMs, tapes, drives, cells, data processing devices or any other repositories of computer software which are used with electronically controlled equipment. The term computer programs, referred to in the foregoing description of electronic data, means a set of related electronic instructions which direct the operations and functions of a computer or device connected to it, which enable the computer or device to receive, process, store, retrieve or send data. This paragraph, n. does not apply to electronic data which is integrated in and operates or controls the building 's elevator, lighting, heating, ventilation, air conditioning or security system ; o. The cost to replace or restore the information on valuable papers and records, including those which exist as electronic data. Valuable papers and records include butare not limited to proprietary information, books of account, deeds, manuscripts, abstracts, drawings and card index systems. Refer to the Coverage Extension for Valuable Papers And Records ( Other Than Electronic Data ) for limited coverage for valuable papers and records other than those which exist as electronic data ; p. Vehicles or self-propelled machines ( including aircraft or watercraft ) that : ( 1 ) Are licensed for use on public roads ; or ( 2 ) Are operated principally away from the described premises. 
This paragraph does not apply to : ( a ) Vehicles or self-propelled machines or autos you manufacture or warehouse ; ( b ) Vehicles or self-propelled machines, other than autos, you hold for sale ; ( c ) Rowboats or canoes out of water at the described premises ; or ( d ) Trailers, but only to the extent provided for in the Coverage Extensionfor Non-Owned Detached Trailers ; or CP 00 17 10 12 Page 2 of 15 a.

b.

c. d.

e. f. g.

h.

i.

j. k.

l. m. 
Accounts, bills, currency, food stamps or other evidences of debt, money, notes or securities. Lottery tickets held for sale are not securities ; Animals, unless owned by others and boarded by you ; Automobiles held for sale ; Bridges, roadways, walks, patios or other paved surfaces ; Contraband, or property in the course of illegal transportation or trade ; The cost of excavations, grading, backfilling or filling ; Foundations of buildings, structures, machinery or boilers if their foundations are below : ( 1 ) The lowest basement floor ; or ( 2 ) The surface of the ground, if there is no basement ; Land ( including land on which the property is located ), water, growing crops or lawns ( other than lawns which are part of a vegetated roof ) ; Personal property while airborne or waterborne ; Bulkheads, pilings, piers, wharves or docks ; Property that is covered under this or any other policy in which it is more specifically described, except for the excess of the amount due ( whether you can collect on it or not ) from that other insurance ; Retaining walls that are not part of a building ; Undergroundpipes, fluesordrains ; q. The following property while outside of buildings : ( 1 ) Grain, hay, straw or other crops ; ( 2 ) Fences, radio or television antennas ( including satellite dishes ) and their lead-in wiring, masts or towers, trees, shrubs or plants ( other than trees, shrubs or plants which are " stock '' or are part of a vegetated roof ), all except as provided in the Coverage Extensions. 


XXXX XXXX Servicer Guide - 4703.2c clearly states : Condominiums - The Project Documents will define the insurance requirements for the homeowners association and the individual unit owner in a Condominium Project, including a Detached Condominium Project and a 2- to 4-Unit Condominium Project. The insurance requirements will define the extent to which the homeowners association will insure the individual units and the unit owner responsibility for individual insurance. 
There are two acceptable options for unit coverage depending on what the governing documents indicate : * The condominium homeowners association must insure the building and structures in the Condominium Project as well as fixtures, machinery, equipment and supplies maintained for the service of the Condominium Project. To the extent required the homeowners association must also insure fixtures, improvements, alterations and equipment within the individual Condominium Units, regardless of ownership. To the extent the condominium homeowners associations policy does not cover the interior of the Condominium Unit or the improvements to the Condominium Unit, the Borrower must maintain an HO-6 unit owner policy. Coverage for the HO-6 unit owner policy must be sufficient to repair the Condominium Unit to at least its condition prior to the claim.

A policy with a coinsurance clause, and inclusion of an agreed amount endorsement or selection of the agreed value option ( which waives the requirement for coinsurance ) is considered acceptable evidence that the 100 % replacement cost requirement has been met.

The coverage provided in the Owl Pointe HOA Master Policy exceeds the requirement for walls in coverage, or HO-6 insurance as claimed by RightPath Servicing . All Inclusive coverage and inclusion of a coinsurance clause exceeds RightPath Servicings request for walls in and betterments and improvements coverage.

Even if HO-6 insurance had been required, RightPath Servicing failed to state the need for interior coverage or HO-6 insurance in their first and second notices dated XX/XX/XXXX and XX/XX/XXXX. RightPath Servicing states hazard insurance although hazard insurance is not referenced in the XXXX XXXX XXXXervicer Guide 4703.2c, the guide RightPath Servicing referred me to for clarification. In fact, the word hazard can not be found anywhere in XXXX but HO-6 is referenced nine ( 9 ) times. 

In a letter dated XX/XX/XXXX RightPath Servicing states : Some homeowners associations include HO-6 in their condominium master policy. If they do, it is not required. It is required only when it is not included in the mater ( master ) policy. 
RightPath Servicing incorrectly claims that homeowners associations may include HO-6 in their master policy. 
If a homeowners association provides insurance for the interior of a condominium unit it would not be referred to as HO-6 insurance, rather, the master policy would simply describe the coverage of the unit to include all fixtures, installations or additions within the boundaries of the units. Whether or not improvements within the boundaries of the unit are covered may also be stated but seems to be avoided as improvements is subjective. 

RightPath Servicing has claimed that XXXX XXXX requires me to carry HO-6 insurance and bases this claim on the XXXX XXXX Servicer Guide - 4703.2c, of which they referred me to in order to substantiate their claim. RightPath Servicing ignores the language regarding WHEN a HO-6 policy shall be required, XXXX XXXX Servicer Guide 4703.2 ( c ) states : To the extent the condominium homeowners associations policy does not cover the interior of the Condominium Unit or the improvements to the Condominium Unit, the Borrower must maintain an HO-6 unit owner policy . Coverage for the HO-6 unit owner policy must be sufficient to repair the Condominium Unit to at least its condition prior to the claim.

At no time does the language in 4703.2 ( c ) imply that the term HO-6 ( coverage ) could or may be found within a homeowners associations master policy.

HO-6 insurance provides unique coverages and can be designed by each purchaser based on an individuals personal needs. HO-6 insurance is only available to an individual unit owner and not the association as a whole. In addition, the terms, as walls and/or betterments and improvements are not found in 4703.2 ( c ) as required language necessary to prove insurance coverage within the boundaries of the unit or interior, as claimed by RightPath Servicing .

RightPath Servicing refuses to acknowledge the fact that the insurance coverage provided by me, the borrower, showing interior coverage and including a coinsurance clause in the master policy IS coverage for the interior of the unit and 100 % RC, Replacement Cost, has been met.

RightPath Servicing has not stated any other reason they believe the interior insurance coverage I have provided does not satisfy this requirement, other than claiming XXXX XXXX requires an HO-6 policy if the declarations of the association state they do not cover the boundaries within the unit and the condominium associations master policy doesnt include the words walls in and betterments and improvements.

This position is beyond negligence.

No improvements or upgrades have been made to the unit that would not be covered by the master policy.

I have never been required to carry HO-6 insurance and had never heard of HO-6 insurance until this issue. 

The repeated refusal to correct the error, or explain why the provided insurance coverage is not sufficient can only be understood to be a deliberate act of bad faith. This has now caused me to contact a law firm for representation. 

In addition to acting in bad faith, RightPath Servicing has severely damaged my credit by reporting negatively to credit bureaus although notices of error are existing, preventing RightPath Servicing from reporting for at least 60 days. 
CFPB - 1024.35 ( h ) ( i ) Effect on servicer remedies ( 1 ) Adverse information. After receipt of a notice of error, a servicer may not, for 60 days, furnish adverse information to any consumer reporting agency regarding any payment that is the subject of the notice of error.

Company response to consumer: Closed with explanation