Consumer complaint received 2023-11-22
Company: Specialized Loan Servicing Holdings LLC
State: MA
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process
Sub-issue: Escrow, taxes, or insurance

Complaint:
On XX/XX/2023, I was force-issued a one-year HO6 policy from Specialized Loan Servicing with a premium of {$1200.00}. I received a letter ( dated XX/XX/XXXX ) around XX/XX/XXXX about this purchase. 

On XX/XX/2023, Specialized Loan Servicing canceled this policy as I bought my own insurance. So the forced policy that Specialized Loan Servicing bought was in effect for 18 days. Yet I was charged {$340.00} which is disproportionate to the annual fee of {$1200.00}. 

I have called a few insurance companies and they all agreed you can't backdate a HO6 policy. Yet Specialized Loan Servicing is apparently charging me for a period of time before the issue date of XX/XX/XXXX. 

In addition, at no point did Specialized Loan Servicing notify me of the actual reason for the forced insurance until after the fact. I called on their first letter and I was told that I needed to update the copy of my supplied insurance because the expiration date was XX/XX/2023. I did this promptly and was told the matter was settled. 

I then called back as I received a second letter. I spoke with the person and he said that the expiration date was updated and that I could ignore any following auto-generated reminder letters and that everything was OK. For this entire 5-month period, I was led to believe by Specialized Loan Servicing that the area of concern was simply updating the expiration date, not that it was a coverage issue. 

This all could have been avoided if Specialized Loan Servicing simply had given a proper notification along with means of remedy. Instead, they misled me at every point of contact saying it was simply a matter of updating the policy expiration date. 

Additionally, the letter from Specialized Loan Servicing said ( in bold ) : " Will cost an estimated {$390.00} annually, which may be significantly more expensive than insurance you can buy yourself. Yet somehow the policy bought for me was {$1200.00}, over three times that amount. 

I am asking for the full amount of {$340.00} back. I relied on Specialized Loan Servicing to not only give me the correct reason for the forced insurance but also on how to remedy it. Instead, their letters and phone calls indicated a completely different reason for the forced insurance. I remedied that request and was told that the matter was resolved. But instead, I was only notified months later that oops the policy was issued anyway and at a much higher premium than they wrote in their own letter in bolded font. I also relied on Specialized Loan servicing holding reasonably to their {$390.00} annual insurance cost and not being blindsided by a policy costing over three times as much. 

At the very least, I should only be responsible for the period of time between the date of issuance and policy end ( XX/XX/2023, to XX/XX/XXXX ) I calculate this 18-day proration of the {$1200.00} policy to be {$60.00}, not {$340.00}. ( {$19.00} based on their original estimate of {$390.00} annual cost )

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