Consumer complaint received 2023-12-22
Company: Freedom Mortgage Company
State: FL
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process
Sub-issue: Escrow, taxes, or insurance

Complaint:
After XXXX, I received a computer generated note from Freedom Mortgage that was dated XX/XX/XXXX, and their written notice regarded increasing my current hazard insurance that would be mandated to include " WIND '' coverage by stating that The insurance we will purchase : They used vague words like " immediately '' but did not specify any date of action, so I called several times and spoke to different customer service representatives and their insurance department as well as the Lender-placed insurance department. I have had the same hazard insurance coverage ( - WIND ) since the inception of my mortgage which was agreed upon years earlier. This same coverage was submitted to them every year and I was never informed of any hazard coverage shortfalls or the specific need to purchase additional " WIND '' coverage until after XXXX XXXX. 

Then I received the next notice ( dated XX/XX/XXXX ) on XX/XX/XXXX and reviewed my original mortgage docs, and their written notice stated that we have purchased Lender-placed insurance, along with additional documents. 
EVIDENCE OF LENDER-PLACED WIND INSURANCE ( XXXX XXXX XXXX XXXX XXXX ) Amount of insurance : {>= $1,000,000} Annual premium : {$56000.00} + {$2.00} XXXX Provides dwelling/building protection against loss. ( Not land or complete property ) Subject to deductibles ( undefined ) not available from Freedom or XXXX XXXX. 
I called the insurance Dept at Freedom, and spoke to XXXX XXXX XXXX # XXXX. 
***She stated that can not see when the lender-place policy was purchased but the effective date is XX/XX/XXXX. 
**Furthermore, the wind policy is subject to a deductible but that deductible amount is only available after a claim has been filed. 
*Finally, the amount of their WIND coverage is 80 % of my current hazard insurance on file, yet only provides coverage for building/dwelling - not the property as a whole. 

The XXXX XXXX XXXX XXXX FL website lists the value of our building/dwelling at $ XXXX, but the value of our land is > $ XXXX and the Freedom mortgage is only $ XXXX yet they have taken out an insurance policy with coverage > $ XXXX. 

My hazard insurance has remained the same since I applied for and was offered an original mortgage which was sold to Freedom and no additional parameters were stated to me. Only late in XXXX was I notified that additional WIND coverage is now required, in addition to my current hazard and flood insurance coverages which are already in place. 

This additional cost is an impossible burden to me, requiring an additional $ XXXX in earned income subject to XXXX which would allow me to spend $ XXXX for this added cost, and I am unable to achieve this additional income annually. I have contacted XXXX different insurance brokers and dozens of insurance companies but am unable to bind coverage specifically for " WIND '' to be added to my existing hazard policy. XXXX agents have written to me that no company will even underwrite homeowner 's policies with " WIND '' in XXXX XXXX. I have discussed this with Freedom Mortgage and offered to payoff the entire loan amount in full within 7 days. 

They sent payment of {$56000.00} to XXXX XXXX XXXX ( not XXXX XXXX XXXX XXXX ) on XX/XX/XXXX but retroactively applied an effective date of XX/XX/XXXX. They have added this bill to my existing Escrow account and will not let me payoff my mortgage without paying this additional full amount of $ XXXX. 

XXXX - Is it legal in the State of Florida to have a an effective date earlier than the purchase date? Can a company require a homeowner to purchase retroactive insurance coverage when there is a XXXX chance of a claim being filed since that time has passed? 
XXXX - Is it legal in the State of Florida to require a homeowner to be Overinsured for building/dwelling? Does an insurance company have the right to set an arbitrary value for such XXXX - Do the above actions represent some type of Insurance fraud??? 
XXXX - The results of their action without offering me a specified date when this would be charged/paid did not leave me any choices or alternatives. 
XXXX - I am forced to payoff the entire mortgage ( with added $ XXXX ) and incur an income tax reportable event by withdrawing the full amount from my IRA to get out from under this. This is an unreasonable mandated over-insurance coverage which has an annual payment more than twice my mortgage payments. My mortgage was $ XXXX per year but would jump to $ XXXX because of this action. 

This company has not given me an opportunity to discuss or obtain additional hazard insurance by a specific given date, and has charged me an additional $ XXXX per year which triples my costs to meet their new requirements. They will not release any specific information regarding the " WIND '' insurance purchased or how they determined the amount of insurance or deductibles, but state that these parameters will be disclosed only after a claim is filed. This represents insurance and mortgage fraud, waste, abuse, and misconduct.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation