Consumer complaint received 2024-09-23
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — Escrow, taxes, or insurance
Company: Mr. Cooper Group Inc. (FL)

My Information : XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXXXXXX XXXX XXXXXXXX Loan Number : XXXX Complaint Filed Against : Mr. Cooper Mortgage NMLS : # XXXX Subject : Improper Escrow Charges and Failure to Remove Escrow on Canceled Flood Insurance Policy ________________________________________ Overview of the Complaint : I am filing this complaint against Mr. Cooper Mortgage for wrongfully force-placing escrow for flood insurance. Since XXXX, I have provided substantial documentation proving that my HOA carries a master flood policy. Despite providing all necessary documentation and numerous follow-up communications, Mr. Cooper Mortgage continues to collect escrow for a policy that has been canceled. This ongoing issue is causing significant financial strain and putting me in a position where I will lose my condo. I am on a fixed retirement income and this wrongful escrow error of {$300.00} a month will make me homeless. 
________________________________________ Background : According to Mr. Cooper, on XX/XX/XXXX, the property/association was rezoned by XXXX to a flood zone. This prompted Mr. Cooper to mail letters stating that we need flood insurance. During this period, I was in XXXX for my fathers funeral in a small village in XXXX XXXX with no access to my mail. As a result, I was unaware of all the changes since I couldnt read my mail. 

Upon learning about the situation, I immediately took action and obtained my own flood insurance policy, paying for the full annual premium myself. After obtaining my own flood insurance policy with XXXX XXXX, I sent proof to Mr. Coopers Insurance Department, which canceled the flood insurance policy that Mr. Cooper force placed. Then, without my knowledge, Mr. Cooper contacted my insurance company and paid for the annual premium, which I had already paid for and provided proof of. This prompted XXXX XXXX my flood insurance company to refund me my premium, and allow Mr. Cooper to escrow it without my request or permission and continue to charge me for the force-placed escrow. 

In XXXX, I learned that I should not have to carry flood insurance since I am part of an HOA, and the HOA is required to carry a Master Flood Insurance policy. I then contacted my HOAs property management company to get a copy of the master policy. Once I obtained the master policy from my HOA, I again contacted the insurance department at Mr. Cooper and submitted proof of that policy. 

On several occasions, when I spoke to Mr. Cooper representatives like XXXX, a manager in the Insurance Department, and XXXX and XXXX from Escrow, they all assured me this should be taken care of. However, to this date, Mr. Cooper refuses to remove the force-placed escrows for flood insurance, even though a manager from their Insurance Department said they can not collect escrow on HOA master policies. Nor am I allowed to carry two flood policies for the same property. Yet, the escrows are still being collected, and no one at Mr. Cooper is able or willing to tell me what this escrow will pay for, since my HOA carries a master flood policy, that no disbursements can be made too, and I have nothing else escrowed. 

When I originally took out the loan, I did not want escrows. However, Mr. Cooper continues to force-place escrows for flood insurance in the amount of {$300.00} a month. I understand Mr. Cooper wants to protect their investment, but I am asking for consideration and understanding from the Mr. Cooper team regarding the flood insurance policy. Mr. Cooper should consider the fact that I am part of an HOA, which is required to have a Master Flood policy for the entire association. XXXX XXXX well-documented issues with insurance companies have been widely reported in the news, and given the size of Mr. Cooper, one would expect them to be aware of current mortgage-related developments in the states where they operate and how long it has taken HOAs to finalize their Master Flood policies.

Given this fact, it took several months for the association to finalize their policy, because the rezoning took place in XX/XX/XXXX. HOAs can not make decisions instantly, as they must go through an approval process with the board and residents before any new expense can be added to the HOA balance sheet. Once that process was completed and the right insurance company was found, the association obtained an insurance policy through XXXX XXXX, which was provided to Mr. Cooper. 

Furthermore, multiple representatives at Mr. Cooper stated that once I paid back Mr. Cooper for the force-placed flood insurance policy escrow balance and proved that I had my own flood insurance coverage, they would completely remove escrow from my account. One of Mr. Coopers insurance representatives even suggested that I call my insurance agent and ask her to backdate the flood policy, so it showed no lapse in coverage, which, according to my insurance agent, is illegal. 

The most recent letter received from Mr. Cooper, which is included in this complaint, outlines that I was placed into a flood zone in XX/XX/XXXX, while in the next paragraph it states that escrows are being force-placed because I did not have flood insurance coverage from XXXX. Why would I have a flood policy for XXXX when we were not put into a flood zone until XX/XX/XXXX? Furthermore, this loan was originated in XX/XX/XXXX, and prior to this loan, my condo was free and clear. 

Upon returning home and securing my own flood insurance policy from XXXX XXXX XXXX ( policy # XXXX ), effective from XX/XX/XXXX, to XX/XX/XXXX, I provided this documentation to Mr. Cooper. On XX/XX/XXXX, they updated their system, resulting in a partial cancellation of the XXXX policy. However, this left a lapse in coverage from XX/XX/XXXX, to XX/XX/XXXX. 

Additionally, on XX/XX/XXXX, I provided Mr. Cooper with the condos master flood policy from XXXX XXXX ( policy # XXXX ), effective from XX/XX/XXXX, to XX/XX/XXXX. Despite this, the Escrow Department continues to charge me {$300.00} per month for an escrowed flood insurance policy that no longer exists. 
________________________________________ Key Events and Dates : XX/XX/XXXX : Property rezoned from XXXX to XXXX, triggering the need for flood coverage. 

XX/XX/XXXX : First XXXX  notice mailed. 

XX/XX/XXXX : An XXXX flood policy ( # XXXX ) was issued, effective from XX/XX/XXXX. 

XX/XX/XXXX : XXXX XXXX XXXX policy became effective, canceling the XXXX policy. 

XX/XX/XXXX : Mr. Cooper partially canceled the XXXX policy. 

XX/XX/XXXX : Provided Mr. Cooper with the condos HOA Master Flood Policy. 

XX/XX/XXXX : I received a letter from XXXX XXXX stating that they had been notified I have flood coverage under my HOA 's master flood policy. Since Florida properties can not have double flood coverage, they canceled XXXX XXXX policy # XXXX, effective XX/XX/XXXX. 
________________________________________ Details of the Issue : Mr. Cooper now claims they are escrowing {$300.00} per month to cover the 45 day lapse in flood insurance between XX/XX/XXXX, and XX/XX/XXXX. However, the policy covering that period has been canceled. 

The current active Master Flood Policy, which was provided to Mr. Cooper, can not be escrowed because no disbursements are required under that HOA Master Flood policy. 

Despite both flood insurance policies being canceled, Mr. Coopers Escrow Department continues to charge me the additional {$300.00} per month, which is unjustified. 

I was informed by multiple customer service representatives that once I paid off the remaining balance on my force placed escrow account, it would be removed. Despite fulfilling this, the escrow charges have not been removed and they tricked me into making an extra escrow payment that fixed nothing. 

Even after I paid for my personal flood insurance policy with my own funds, Mr. Cooper wrongfully escrowed it without my consent and had the insurance carrier issue me a refund, despite my clear instruction that I did not want any part of the loan escrowed. 
________________________________________ Resolution Sought : Removal of escrows from my loan. 

Please clarify what exactly is being escrowed, and where the extra {$300.00} per month is being disbursed? 

Please clarify how the $ 300 monthly escrow was calculated for an XXXX XXXX XXXX policy with a total annual premium of {$460.00}? 

Reimbursement of all amounts wrongly charged for the canceled policy. 
________________________________________ Thank you for your time and assistance. I look forward to a prompt resolution. 
Sincerely, XXXX XXXX XX/XX/XXXX XXXX