Consumer complaint received 2021-12-14
Company: Specialized Loan Servicing Holdings LLC
State: VT
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process

Complaint:
This is precisely what happened to me. 
https : //www.consumerfinance.gov/ask-cfpb/what-can-i-do-if-my-mortgage-lender-servicer-is-charging-me-for-force-placed-homeowners-insurance-en-219/ The lender ( Specialized Loan Servicing ; SLS ) rejected the bill from my homeowners insurance company ( XXXX XXXX XXXX XXXX While claiming they had paid it in my escrow statement and even increasing my escrow payments! When the insurer offered to reinstate I immediately alerted the lender. But they still let the policy get cancelled, sending the payment to the insurer only after the policy was already cancelled and then insurer refunded me that money. Only then lender started putting pressure on me for proof of insurance and threatening to place a more expensive insurance. 
I managed to get my insurer issue a new policy. But now the lender wants to charge me retroactively for the period I was not insured due to their incompetence ( or malicious intention? - one never knows these days what will the desperately greedy come up with to fleece us ) at their insurance prices! Despite this is now past tense, and for 2/3 of the time of the laps I couldn't even know the policy would be cancelled in the end due to their negligence, because policy continued to be listed as active both on the lender 's and on the insurer 's website. 

This is unfair, unethical, and wrong. Should be criminal. 

On XX/XX/XXXX I received a cynical letter dated XX/XX/XXXX from the lender informing me there was a lapse in my homewners insurance coverage from XXXX and threatening to add a bogus " insurance charge '' to my account in amount of {$1300.00} - at a hugely inflated rate ( given that my homeowners insurance premium for the entire year is now {$1100.00} ). 

I have absolutely no intention of paying that criminally assessed charge. 

The lapse in my homeowners insurance coverage is fully manufactured and engineered by the actions of the lender. They are responsible for the insurance cancellation. And they should be forced by the law to bear the consequences. I was not at all aware that the insurance would be cancelled retroactively until it was actually cancelled. The lender deliberately let my insurance lapse only to create this situation and now try to extort exorbitant sum of money to cover the lapsed period by the product they are pushing. They should be held responsible for letting my insurance lapse - despite my numerous warnings over the span of four months!

This lender places unreasonable hurdles in access and communication. There is a different address for everything. Which purpose is only to confuse homeowners. It is their responsibility to provide customers support and respond to homeowners timely. I sent numerous notices of error, requests for information and qualified written request regarding this matter to the lender that where answered late, not answering my questions, and not solving the problem at hand, XXXX. preventing my homeowners insurance from lapsing. This was a completely preventable problem if the lender responded to my letters timely and with intelligence. Given that it did not I can only deduct that they are either incompetent or did that with a criminal intention. 

Today it is XX/XX/XXXX. And the lender still did not pay the new homeowners insurance policy that I just obtained. Typically for them, confusing their customers, the lender still lists my old policy at their customer service web site ( sls.servicingloans.com ), and the new policy at their insurance website ( www.mycoverageinfo.com/sls ). The insurer sent me a letter today - informing me that the lender still did not pay the insurance from XX/XX/XXXX that I obtained- are they doing the same thing again? 

I would be perfectly fine to pay it myself! 

So, I called SLS today and after despairing 20 minutes among the menu choices none of which includes speaking with a live human being I was lucky to get someone to speak to me. She said they are going to pay. She said they are going to send payment next Monday ( XX/XX/XXXX ). Why? That's too late. The insurer wrote on the bill the due date is XX/XX/XXXX. She placed me on hold. When she came back she said they will send payment by XXXX tomorrow. Am I paranoid not beleiving them a word they say, until I see that payment made? No. I have bad experience with them. And I want everybody to bear witness to that. 

I disagree that I can be billed to insure the past. Whatever happened from XXXX happened. We can't get that time back. We are incredibly lucky that nothing happened that would require a claim to be filed against my homeowners insurance. It was indeed indolent and irresponsible for lender to let my insurance lapse despite me warning them in several letters over four months and providing them with detailed information to contact the insurer and address the issue timely. But nothing insurable can happen anymore during that period. I needed an insurance then, and to my best knowledge I had insurance then : I had no reasons to believe from the information that I could see about my accounts both at my insurer 's web page and on my lender 's web page that my coverage was not in force, until the insurer sent a cancellation notice late in XXXX. I don't need an insurance now for the period that passed and will never come back, and I have no intention of buying it. Particularly because I am not at fault for this lapse of coverage : the lender is. They should be penalized for ruining my summer over that. 

Timeline : XXXX automatically renewed my homeowners insurance policy for period XXXX and billed the lender. My lender changed since the last year, but I did update the insurer with the new lender 's address and the loan number. 

Travelers informed me ( in an email by XXXX XXXX, XXXX XXXX XXXX, on XX/XX/XXXX ) that they sent electronic bill on XX/XX/XXXX to Specialized Loan Services and that the bill was rejected by the mortgage company. Why? How? 

XXXX then sent me a bill on XX/XX/XXXX. 

Specialized Loan Servicing also on XX/XX/XXXX sent me a letter informing me they are increasing my motnhly payment due to the escrow shortage. In that letter in my Escrow Account History table they listed {$1000.00} as " what we paid out '' for homeowners insurance in XX/XX/XXXX. 

I sent a letter to SLS on XX/XX/XXXX asking them to look into that before the policy expires on XX/XX/XXXX, giving them XXXX contact information. 

On XX/XX/XXXX XXXX sent me a letter ( which I received a week later, so after my policy already expired ), saying they received my correspondence, however " not at designated address for such inquiries ''. What kind of rank XXXX is that? I sent an urgent letter informing them of the imminent lapse in my homeowners insurance, and they receive it, and don't do anything, because they did not receive it at their preferred address? This is callous disregard for homeowners. 

I resent the letter on XX/XX/XXXX to their " designated address for such inquiries '' which they acknowledged receiving on XX/XX/XXXX, after the policy already expired with them being duly informed about that by me, but responded only that my case is under review and that they will have a response issued to me within applicable federal timeframes. No actionable response about insurance. 

Meanwhile, XXXX sent an offer to reinstate on XX/XX/XXXX. 

SLS sent another non-response to me on XX/XX/XXXX saying they will have a response issued within 15 days. No mention of whether they contacted the insurer and accepted their offer to reinstate. 

Finally, in a letter on XX/XX/XXXX, SLS responded to my inquiry from XX/XX/XXXX, more than 60 days after my rather urgent notice and request to prevent my homeowners insurance from lapsing. 
In that letter they stated " Regarding the insurance payment referenced in your dispute, SLS records indicate that the policy was cancelled due to non-payment as a result of an assumption of the loan occurring at that time. As such, the payment of {$1100.00} was requested for an overnight disbursement on XX/XX/XXXX. '' The loan assumption occurred moths before, and the insurance was never cancelled before. Also, note the precise language : the payment was requested. It doesn't say whether the payment was submitted. It was not. 

I sent another letter to SLS on XX/XX/XXXX asking them to clarify whether they actually paid or not. 

On XX/XX/XXXX they responded with yet another stupid letter telling they will have a response issued to me within applicable federal timeframe. 

Finally on XX/XX/XXXX SLS sent me a letter informing me that they sent a {$1100.00} payment - due in XXXX- to XXXX on XX/XX/XXXX. XXXX meanwhile cancelled that policy, and rejected that payment, and sent me a refund. 

I informed SLS about that in the letter on XX/XX/XXXX. 

On XX/XX/XXXX they informed me that they " forwarded my letter to the appropriate department for review '' - funny how they did not know to forward my letter from XX/XX/XXXX to the appropriate department but instead deliberately let my insurance lapse, isn't it? 

On XX/XX/XXXX XXXX sent me a letter titled " Cancellation Notice Received '', asking me to call my insurance and get a new policy, after they screwed up my old. On the record : I managed to get XXXX issue me a new policy, despite the cancellation, which got effective on XX/XX/XXXX. 

On XX/XX/XXXX just to emphasize how suddenly important for them is that I have a homeowners insurance now after they had let it get cancelled, SLS sent me a threatening letter stating " Because hazard insurance is required on your property, we plan to buy 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. '' I must do nothing but XXXX. This is precisely what precipitates the rise in XXXX that drove the life expectancy in this wealthy developed country down even before the pandemic as desribed in the phenomenal book by XXXX XXXX and XXXX XXXX, XXXX XXXX XXXX : the malignant, malevolent behavior of utterly immoral corporations that prey on people- they destroyed my insurance and now they want to bill me for it! 

On XX/XX/XXXX the SLS finally answered my letter of XX/XX/XXXX ( which they acknowledged receiving on XX/XX/XXXX ). In that letter they say some downright fantastic things like : " On XX/XX/XXXX we requested that a premium payment of {$1100.00} be sent to XXXX XXXX XXXX. The premium payment was issued to XXXX XXXX XXXX on XX/XX/XXXX. '' - I requested the payment be sent on XX/XX/XXXX. Why it took TWO MONTHS for the lender to even acknowledge that request? And why did it then take more than a month for them to actually make that payment? Despite rising my escrow payment and charging me for it! When they say " we requested '' - who are we? Whom did they request it from? They are writing this as if their various offices and departments are separate companies?! 

Also from the SLS letter of XX/XX/XXXX : " Our records indicated XXXX XXXX XXXX as your homeowners insurance carrier for the period of XXXX. On XX/XX/XXXX we received a cancelation notice from XXXX XXXX XXXX effective XX/XX/XXXX, along with a premium notice. However, a payment was inadvertently not sent to XXXX XXXX XXXX. '' So, if they had XXXX on the record as my insurer why did they reject their bill on XX/XX/XXXX? And if they knew they need to pay by XX/XX/XXXX, why didn't they pay? Oh, they did. But inadvertently they didn't send the payment to XXXX?! Despite having them as my insurer on the record and despite me sharing with them all relevant information in the letter that they acknowledged receiving on XX/XX/XXXX. How can that then be my fault now? 

Because, this is precisely what SLS wants to make it look like now : my fault. I just received their letter dated XX/XX/XXXX, where they are threatening to charge {$1300.00} to my account as an insurance charge for the period in which they engineered a lapse in my homeowners insurance policy from XXXX. Prorated for that period under my insurance the charge would be {$570.00}. Theirs is a manufactured charge that does not insure anything because events that already happened can not be insured retroactively. And it is 2.3x more than I would pay if they did not XXXX up my account by their negligence. So now the negligence is coupled with extortion. XXXXXXXX XXXX XXXX XXXX XXXX XXXX XXXX.

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