Consumer complaint received 2022-03-02
Company: JPMORGAN CHASE & CO.
State: RI
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process

Complaint:
I am filing this complaint against JPMorgan Chase ( Chase ) because, as will be explained in detail below, Chase missed payment on my homeowners insurance premium, resulting in a lapse in insurance coverage between XX/XX/XXXX and XX/XX/XXXX; failed to notify me of the lapse in coverage for three months ; and is now attempting to charge me outrageous fees for retroactive insurance coverage. I have spent hours on the telephone with various representatives at Chase attempting to resolve this issue. However, Chase refuses to accept any responsibility for its own errors and omissions, and has instead provided nothing but conflicting and contradictory excuses for this egregious mistake. Ultimately, my home was not insured for three months through no fault of my own, without my knowledge, and without my ability to resolve or mitigate the issue. I respectfully request that the CFPB review these unfair acts and practices committed by Chase, and that CFPB conduct a careful review of Chases internal policies and procedures that, as my experience makes clear, inadequately protect Chases customers. 

* * * I purchased my home in XX/XX/XXXX, obtaining my mortgage through a local mortgage provider. They subsequently sold my mortgage to Chase, which became my servicer effective XX/XX/XXXX. 
//// My home insurance policy came up for renewal on XX/XX/XXXX. Chase failed to pay the premium, resulting in the policys cancellation. Chase made no effort to communicate with me during this period, and I did not realize that I lacked home insurance until XX/XX/XXXX, when Chase sent me a letter, dated XX/XX/XXXX, informing me that they needed proof of my home insurance. On XX/XX/XXXX I contacted my insurance agent and asked her to send Chase the requested documentation. She quickly identified that my insurance had been canceled and immediately took out a new policy for me, effective XX/XX/XXXX. My insurance company charged me a {$50.00} fee to account for the gap in my coverage. 
//// Chase sent me a second letter, dated XX/XX/XXXX, informing me that although they now had proof of my current insurance, they still needed proof that I had homeowners insurance during the three-month period between when my first policy was cancelled and when I took out the new policy. In the absence of such evidence, Chase said that they would take out their own policy for the gap period, charging me a premium of {$830.00}, which is approximately twice the premium I pay for my other insurance over a three-month period. This makes little sense. First, a retroactive insurance policy is, by definition, for a period of time that has already passed, and so can never be subject to an insurance claim ; it thus serves no practical purpose, and yet would create a windfall for the insurance company that sold the policy. Second, and most importantly, the gap that Chase wanted to charge me to fill was caused by Chases own failure to pay my premium in XX/XX/XXXX. 
//// I received the XX/XX/XXXX letter on Saturday, XX/XX/XXXX, and I called Chases customer service line for the first time on Monday, XX/XX/XXXX. Chases representatives proceeded to tell me three different, inconsistent stories for why they did not pay my insurance premium, and continued to insist that they would charge me $ 800+ unless I could somehow take out a retroactive insurance policy to cover the gap. 
//// First, Chases Insurance groups representative took the position that Chase had no obligation at all to pay my home insurance premium in XX/XX/XXXX. In her telling, Chase had only acquired my mortgage in XX/XX/XXXX, and was not responsible for paying my premium until Chase had serviced my mortgage for at least a year, sometime after XX/XX/XXXX. By this logic, I was responsible for directly paying my insurance premium until it came due for the third time in XX/XX/XXXX. This, despite the fact that Id been paying insurance premiums into my escrow since XX/XX/XXXX. She seemed to see no difference between Chases obligations if it had originated a mortgage in XX/XX/XXXX, compared to Chases obligations when it acquired a mortgage with a preexisting escrow account. I asked the Chase representative when Chase had ever informed me of my responsibility to pay my second years premium, and she dodged the question. 
//// The representative then connected me to a second representative, from Chases Mortgage group , so that the three of us could better understand what had happened. At that point I was given the second version of why Chase had failed to pay my premiumthat in XX/XX/XXXX Chase had attempted to contact the insurance company to pay my premium, but had difficulty getting the insurance company to call them back. I was told that, in the face of this communication issue, Chase let my coverage lapse ; and it didnt take the most obvious step to mitigate the situationcontact me so I could help them resolve their difficulties and ensure that my home remained insured. 
//// Nevertheless, Chases representatives told me that this was MY fault. They said they suspected that my insurance company was not responsive to them because it did not know that I had a new mortgage servicer, and that I should have contacted my insurance company to tell them to send my XX/XX/XXXX bill to Chase. This position directly contradicted the statements that Chase had made to me in its XX/XX/XXXX welcome letter, informing me that they would begin servicing my mortgage. The letter said, among other things : //// Insurance Do I need to update my homeowners, hazard or flood insurance policy? 
No, your previous mortgage loan servicer will notify your insurance company of your new account number and to change the mortgage clause on your policy ( s ) to the information below. 
//// Accordingly, Chases position appeared to be that its failure to pay was my fault because I had not done something that Chase previously told me I did not have to do. 
//// The Chase representatives ' statements are also at odds with documentation that I have received from the insurance company that indicate that the company had identified Chase as the mortgagee prior to my premium 's due date. 
//// I responded on the phone that their arguments did not make sensethat their first position, that Chase had no responsibility at all to pay my premium, was inconsistent with Chases own actions in XX/XX/XXXX to try to pay the premium ; surely the efforts in XX/XX/XXXX indicated that, on some level, Chase believed itself to be responsible for paying the premium. Second, I took issue with the fact that Chase, upon meeting some resistance, decided to give up and let my insurance lapse, rather than contact me and work with me to resolve the situation. The representatives offered to escalate my situation to an account executive who could assess whether Chase had any fault. I said that my ask was that Chase either waive the requirement that I fill the gap in insurance, or else cover the cost of the gap. I was told that I would receive a response in 3-5 business days. 
//// On Saturday, XX/XX/XXXX, nearly two weeks after my phone call with Chaseand having never received a follow-up message as promisedI received another letter from Chase, dated XX/XX/XXXX XXXX This letter informed me that this was my second and final notice to provide proof of insurance covering the three-month gap. And, again, that absent such evidence Chase would charge me {$830.00} to fill the gap. I called Chase once again, on Monday, XX/XX/XXXX, to inquire about the status of my request from XX/XX/XXXX. 
//// I was told that my request for a waiver had been denied. I was also told a third version of why Chase had failed to pay my premium in XXXX. In Version # 3, Chase did in fact speak to someone at my insurance companya woman named XXXXand according to Chases internal notes, XXXX said that my insurance was paid in full. Of course, it wasn't paid in full, and Chase now concedes that fact. But Chase apparently never asked for written confirmation, and they never contacted me or took any other steps to verify it. They simply stopped trying to pay the premium despite the fact that my mortgage requires them to pay the premium on my behalf, and despite the money that had accumulated in my escrow account for the purpose of paying my insurance premium. It is obvious in retrospect that there was some sort of miscommunication between Chase and the insurance company in that phone call. However, because Chases notation falsely states ( per XXXX ) that my premium had been paid in full, Chase has determined that it is absolved of all responsibility. Chase instead takes the position that I am liable for the effects of its nonpayment, even though I was not even aware of these conversations happening at the time. 
//// On XX/XX/XXXX, I contacted my insurance agent, and through her the insurance company, to try to verify and understand what Chase had told me. I was told that their records show Chase was sent an invoice and simply never paid it. The insurance company has no notes of communications with Chase, such as the conversation with XXXX. However, I did learn that the company classifies my billing plan as Mortgagee Direct Bill Pay In Full, meaning that the mortgage servicer is directly billed for my premium and is expected to pay the premium in full. It is possible that, in conveying that information to Chase, the Chase representative either misunderstood the insurance representative, or took unclear notes regarding the billing plan that are now being misinterpreted by Chase. Finally, in an effort to avoid Chases high fees, I asked if the insurance company could backdate my current policy to cover the gap from XX/XX/XXXX ; I was told that was not possible to do, and that a retroactive insurance policy does not serve any purpose. 
XXXX// Section 1031 of the Dodd-Frank Act prohibits mortgage servicers such as Chase from engaging in unfair XXXX deceptive, or abusive acts or practices. According to the CFPBs exam manual, it considers an act or practice to be unfair where it causes or is likely to cause substantial injury to consumers ; the injury is not reasonably avoidable by consumers ; and the injury is not outweighed by countervailing benefits to consumers or to competition. 
XXXX Chase, through its incompetence and/or inadequate internal policies and procedures, failed to pay my insurance premium, causing its cancellation. This resulted in significant risk to my home and my family, as we lived in an uninsured home for three months without knowing it. It has also caused me substantial monetary damages, as Chase is now charging me $ 800+ to fix its mistake by requiring me to purchase what amounts to a junk insurance policy. Throughout this entire period, Chase kept me in the darkI could not stop the cancellation of my policy, nor mitigate the risks and damages Chase caused me, because Chase left me unaware that there were any problems with payment of my premium. 
//// My request is that Chase simply take responsibility for its own actions and omissions, and not leave me to suffer the consequences of miscommunications and errors that I had nothing to do with, and about which I was not aware. Thank you very much for your consideration. Please feel free to contact me if I can provide any additional information.

Company response to consumer: Closed with explanation