Consumer complaint received 2023-09-26
Company: Mr. Cooper Group Inc.
State: FL
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process
Sub-issue: Payment process

Complaint:
On XX/XX/XXXX, received XX/XX/XXXX RightPath Servicing sent me a Second and Final Notice to purchase Hazard Insurance or RightPath Servicing would initiate LPI for Hazard Insurance. On page three ( 3 ) of this Second and Final Notice, RightPath Servicing describes in detail, the Hazard Insurance coverage that will be purchased by them if I do not purchase this Hazard Insurance, as described by RightPath Servicing on page 3.

RightPath Servicing clearly describes this Hazard Insurance as The hazard insurance we obtain will cover ONLY the structure of your home ( e.g. the building, walls, roof and permanent attachments ).

This description is coverage already found in my HOA Master Policy coverage that they had received proof of, multiple times. 
In XXXX of XXXX, I attempted to pay my monthly mortgage payment and noticed the amount increased by {$1000.00} per month and the reason for increase was listed as HO6 Insurance coverage ( Policy ).

I filed a complaint with the CFPB claiming that I was not advised by RightPath Servicing to purchase HO6 insurance, that RightPath Servicing claimed I needed to purchase acceptable insurance, Hazard Insurance coverage as they described in the Second and Final Notice letter dated XX/XX/XXXX, the description being something other than HO6 coverage. I asked for RightPath Servicing to describe the difference between Hazard Insurance and HO6 insurance, to see if RightPath Servicing identifies HO6 insurance as Hazard insurance in any way. They do not. In addition, I learned at this time, that Hazard Insurance is not a form of insurance that can be purchased separately from Homeowners Insurance, as HO6 can be purchased as separate coverage. I was repeatedly told that I needed to purchase Hazard Insurance when, 1. Its not something available for purchasing and 2. RightPath never purchased Hazard Insurance on my behalf because it doesnt exist as a separate policy. Yet, they continued to instruct me to purchase Hazard Insurance. 

On XX/XX/XXXX RightPath Servicing addressed my request for them to explain the difference between Hazard insurance and HO6 insurance. 
Page 1, Paragraph 3 of the XX/XX/XXXX response letter states : Hazard insurance protects the structure of your property from damaging events lilke ( like ) windstorms and fires. In a condominium, the homeowners association master policy normally provides coverage for the exterior structure.

Page 1, Paragraph 4 states : For properties that are condominiums, we require an additional HO6 policy which covers the interior of the condominium unit and any interior improvements made. 

In the Second and Final Notice letter dated XX/XX/XXXX, RightPath Servicing clearly describes ( Hazard ) insurance ( the exterior, roof etc ) that is NOT coverage offered by an HO6 policy. RightPath Servicing goes on to explain what the insurance they purchase WILL NOT cover and what they described as not covered would be coverage normally offered by an HO6 policy such as liability and personal belongings, further moving away from anything describing HO6 coverage.

The Second and Final Notice has completely different language than the first notice of XX/XX/XXXX. There is no mention of betterments and improvements being needed in this Second and Final Notice. 
RightPath Servicing never came close to describing HO6 coverage in this Second and Final Notice, in fact, it was the exact opposite.

This deliberately deceptive tactic has caused me great financial harm, also severely damaging my credit worthiness.

RightPath Servicing sends 50 page responses to inquiries in order to cloud this issue but the simple fact is, the Second and Final Notice, dated XX/XX/XXXX, instructed me to purchase insurance I already have, insurance that was never purchased by RightPath Servicing on my behalf.

Company response to consumer: Closed with explanation