Consumer complaint received 2020-01-21
Company: Synovus Bank
State: FL
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process

Complaint:
My problem is regarding Force -Placed Flood Insurance. I am not very good at reading these escrow statements, but it appears my mortgagee, Synovus Bank acquired forced-placed insurance for my condo on XX/XX/XXXX without my knowledge, and now again in XX/XX/XXXX. My payment went up from {$1300.00} to XXXX. You can imagine what a financial blow this is for a XXXX-year-old retired senior getting {$1200.00} per month in Social Security. This increase in payment has put my condo at risk of foreclosure because I have no back up funds. 

On XX/XX/XXXX, I sent Synovus Bank a letter along with a copy of the insurance policy and emails from the Condominium Owners Associations ( COAs ) insurance company stating they had sent Synovus proof of insurance ( copies enclosed ). I also called Synovus several times, in XX/XX/XXXX, and told them I have insurance provided through my Condominium Owners Association and proof was on its way. This letter was sent several weeks ago, and they have not responded in any way. 

Synovus never properly informed me with a phone call or a signature-required letter. This is the only logical way to assure the condo owner can be made aware of any inquiries from the bank. The only way I found out about this problem was when I saw they raised the monthly payment from {$1300.00} to {$2000.00} per month. 

Although, I read a letter from Synovus seeking insurance information in XX/XX/XXXX, I never received any request for information in XX/XX/XXXX. Moreover, Synovus should have sought proof of insurance from the Condominium Owners Association. The COA is the insurance purchaser, as indicated by the Condominium Rider which is a legally binding part of the loan documents. Still, I sent Synovus a copy of the insurance in XXXX and then again in XX/XX/XXXX, though not required, as per the Condominium Rider below. 

I live in a Condominium Owners Association ( COA ) COA provides structure and flood insurance for its members. Synovus should reasonably have known I have flood insurance, as it is in a Condominium Rider that is part of the loan documents. - Section 1024.37 ( b ) - Under federal law, the servicer must reasonably believe that the borrower has failed to maintain insurance coverage on the home before purchasing a force-placed insurance policy. 

According to the Rider - Condominium Covenants ( Copy Enclosed ) my only obligation is to give Synovus notice if there is a lapse in the Master or Blanket policy. No such lapse has occurred during the period Synovus forced-placed insurance on my condo, or ever. Furthermore, as per the Rider Condominium Covenants Synovus is in non-conformance of the provisions of section 3 and section 5, as per Condominium Covenants below. 

The Rider Condominium Covenants states : So long as the Owners Association maintains, with a generally accepted insurance carrier, a " Master '' or " Blanket '' policy on the Condominium Project which is satisfactory to lender and which provides insurance coverage in the amounts ( including deductibles levels ) for the periods, and against loss of fire, hazards included within the term " extended coverage, '' and any other hazards, including but not limited to, earthquakes and floods, from which lender requires insurance, then ( i ) lender waives the provisions of section 3 for the periodic payment of yearly payment to lender of the yearly premium installments for property insurance on the property, and ( ii ) borrowers obligation under section 5 to maintain property insurance coverage on the property is deemed satisfied to the extent that required coverage is provided by the Owners Association policy.

Borrower shall give lender prompt notice of any lapse in required property insurance coverage provided by the Master or Blanket policy.

1. Period of overlapping insurance coverage. Section 1024.37 ( g ) ( 2 ) requires a servicer to refund to a borrower all force-placed insurance premium charges and related fees paid by the borrower for any period of overlapping insurance coverage and remove from the borrower 's account all force-placed insurance charges and related fees for such period. A period of overlapping insurance coverage means the period of time during which the force-placed insurance purchased by a servicer and the hazard insurance purchased by a borrower were in effect at the same time. 

It appears banks are very quick to impose insurance on the poor homeowner and are just ripping off people as evidenced by the scores of class-action suits I saw online. If this was solely about protecting the banks investment, they would be more diligent in acquiring the information they need in order to prevent imposing insurance on the homeowner. For instance, a simple telephone call to the homeowner would do the job. But the truth is, this forced-placed insurance is about banks making horrendous amounts of money, in some cases with a 400 % to 500 % mark-up over average premium. 

I hope Consumer Protection Agency can help me with this as I truly face losing my condo. 
Copies of documents enclosed.

Company response to consumer: Closed with explanation