Consumer complaint received 2022-10-13
Company: GATEWAY FIRST BANK
State: TX
Product: Mortgage
Sub-product: VA mortgage
Issue: Trouble during payment process

Complaint:
On XXXX2022 we closed a XXXX XXXX XXXX XXXX on our property in XXXX XXXX  XXXX At closing our loan was serviced by XXXX Mortgage. 

o On XXXX2022 a message was sent to us stating our policy through XXXX met their terms for acceptable coverage and we needed to bind it so that we could proceed. 
o On XXXX2022 we submitted the requested/required bound homeowner 's policy to complete the funding of our mortgage loan. 
o XXXX XXXX2022 XXXX Mortgage received the same bound policy directly from XXXX for approval prior to binding it. 
o The policy clearly stated that it EXCLUDED windstorm insurance due to the location of our property, XXXX XXXX XXXX 
o XXXX mortgage accepted this policy and funded our loan without requiring the purchase of independent windstorm insurance. 
o We closed ; signed documents, notarized, and filed. 
o The monthly payment and escrow were partially determined based on this homeowners policy. 
o This was set at {$1300.00}. 
Principle and Interest {$1200.00} Escrow {$88.00} On XXXX2022 XXXX Mortgage notified us that our loan was being transferred to a new servicer, Gateway Mortgage. 
XXXX Mortgage states the effective date of this transfer is XXXX. 

On XXXX2022 Gateway Mortgage notified us that we were being transferred to a new servicer, Gateway Mortgage. 
Gateway Mortgage ( XXXX XXXX XXXX Mortgage License XXXX ; XXXX XXXX XXXX XXXX TN XXXX ). 
Gateway Mortgage states the effective date of this transfer is XXXX 

In both notices there is clear language that states nothing in our actual loan terms will change, just the company servicing it. 
Our original loan does not include conditions relating specifically to the requirement of or obtaining windstorm insurance. 

On XXXX2022 we made our agreed upon mortgage payment of {$1300.00} and have the mortgage statement dated XXXX 

On XXXX2022 Gateway issued an initial letter stating that their records show that o Your wind insurance expired, we do not have evidence that you have obtained new coverage. Because wind insurance is required on your property, we bought insurance for your property. You must pay us for any period during which the insurance we buy is in effect, but you do not have insurance On XXXX Gateway issued a second letter stating that their records show that o Your wind insurance expired, we do not have evidence that you have obtained new coverage. Because wind insurance is required on your property, we bought insurance for your property. You must pay us for any period during which the insurance we buy is in effect, but you do not have insurance o This letter included a section quoting the cost at {$4900.00} annually. 

On XXXXXXXX  Gateway issued a third letter stating that they had not received insurance information for our property location. 
o In this letter they included We will cancel this insurance coverage as of the effective date of an acceptable replacement policy that you provide. If this effective date is not the same as or prior to your old policy expiration date of XXXXXXXX there will be a premium charge for the lapse in coverage. 

In all three of these letters Gateway states that we had windstorm insurance at some point prior to the servicing change and did that we did not keep/renew it. 

It is our contention that this language is used in order to legitimize the force placed insurance as it can not be enacted and placed unless the loan holder has cancelled their policy or allowed it to lapse. The coverage can not be deemed insufficient to meet requirements as it was accepted and in force at the time the loan was closed. 
The policy in place is current, is the original accepted coverage policy and was never cancelled or allowed to lapseespecially since it is paid through escrow. 

Gateway purchased XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX o Policy Tracking ID : XXXX o Named Insured listed as Gateway Mortgage. 
o The policy is not in our name as the loan holder and attempts by us to obtain 1st hand information regarding this policy have yielded no results because this is the case. 
o The website indicates this is a firm based in XXXX with a new XXXX operations based in XXXX o Taken from the website : We offer products in the following areas of coverage : Energy Insurance Environmental Insurance Errors & Omissions Fine Art and Specie Kidnap and Ransom Personal Accident Political Risk Terrorism and Sabotage International Surety Reinsurance Casualty Reinsurance Property Reinsurance Specialty Reinsurance o We have attempted to research these coverages and to this point none appears to be applicable to windstorm insurance coverage. 
o We have also attempted to reach out to XXXX XXXX to no avail regarding the policy. 

o The final clause of the Document from XXXXXXXX states THIS DOCUMENT IS ISSUED AS EVIDENCE OF INSURANCE ONLY. IT DOES NOT CONSTITUTE A LEGAL CONTRACT OF INSURANCE. 

On XXXXXXXX  we received a notification from Gateway dated XXXXXXXX  stating our monthly mortgage payment would be changing effective XXXX 
o The original amount is {$1300.00} ; Principle and Interest {$1200.00} Escrow {$88.00} o The new amount is {$2400.00} ; Principle and Interest {$1200.00} Escrow Payment {$490.00} Shortage Payment {$620.00} o An increase of {$1000.00} In addition Gateway contends that the original policy and the policy they received on XXXXXXXX differ in the information on the exclusion of XXXX XXXX. However, the copies obtained directly from XXXX on XXXX XXXX XXXX XXXX XXXX  are identical ( see attached ). 
We contest this increase and the addition of both a requirement of windstorm insurance and the force place insurance. 
We never had windstorm insurance and were never notified before or during the loan process with XXXX XXXX that this was necessary. 
We have not been supplied a copy of the force placed insurance policy. 
The terms of the service transfer state nothing will change with the terms of the loan : this would include insurance coverage and escrow not related to taxes. 
We contend that Gateway Mortgage is attempting to rectify an oversight in their own initial loan agreement at the cost of the loan holder. 

Documentation and points of contact are readily available to support each of these disputes and claims.

Company response to consumer: Closed with explanation