Consumer complaint received 2024-03-12
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — Fees charged
Company: WELLS FARGO & COMPANY (CO)

Background : Our property hazard insurance with XXXX XXXX XXXX XXXX expired on XX/XX/XXXX. We did not receive the written notice required under Colorado statute, leaving us with little time to secure replacement coverage as required by the terms of the Deed of Trust under our loan agreement ( " LA '' ) with Wells Fargo Bank , N.A . ( " WF '' ). Further complicating the process of securing replacement coverage is the current perceived wildfire risk throughout Colorado, which has resulted in lack of available coverage from any carriers in more than 50 % of the state, including in the area in which our property is located. 

We received an initial notice of lack of evidence of insurance coverage from WF on XX/XX/XXXX stating, in part, " Because hazard insurance is required on your property, we plan to buy insurance for your property '', clearly indicating that XXXX had not yet purchased such coverage. We bound replacement coverage effective XX/XX/XXXX and provided this information to Wells Fargo on XX/XX/XXXX. We received confirmation of receipt of proof of coverage from WF on XX/XX/XXXX, with additional commentary stating, in part, " Our records show that there was a lapse in coverage from XX/XX/XXXX to XX/XX/XXXX. An insurance charge of {$2600.00} may be charged to your account for the period of time that the coverage was in force. In order to avoid this charge or have it reversed from your account; please provide us with evidence of insurance for this lapse period. '' On XX/XX/XXXX, we provided a No Loss Letter to WF which certifies that no losses occurred during the lapse period, memorializing the fact that there are no losses to insure against during the lapse period. 

Page 5, section 5, paragraph two of the LA states, in part, " If Borrower fails to maintain any of the coverages described above, Lender may obtain insurance coverage, at Lender 's option and Borrower 's expense. ". As evidence of insurance was provided to WF on XX/XX/XXXX and subsequent correspondence from WF dated XX/XX/XXXX indicates that WF had not yet obtained coverage at Borrower 's expense, the above language in Section 5 of the LA should prohibit WF from obtaining coverage at Borrower 's expense " after '' evidence of coverage has been provided. 

In addition to the foregoing, page 5, section 5, paragraph two of the LA further states " Any amounts disbursed by Lender under this Section 5 shall become additional debt of Borrower secured by this Security Instrument. '' On XX/XX/XXXX, we received a copy of the declarations for an insurance policy " purportedly '' taken out by WF. The declarations show an effective date of XX/XX/XXXX and an annual premium in the amount of {$46000.00}. The bottom right corner of the policy declarations notes a policy issue date of XX/XX/XXXX. There is no evidence of any amounts actually " disbursed '' by WF as is required under the terms of the LA. 

Our latest mortgage statement, dated XX/XX/XXXX, now shows an escrow balance of ( {$2600.00} ), with interest being charged at 3.125 % per annum. As WF 's correspondence history and the declarations page for the policy which WF purportedly took out both clearly indicate that it did not obtain coverage until " after '' we had provided evidence of coverage, WF has no exposure for the lapse period pursuant to the No Loss Letter provided to WF, and further WF has failed to provide proof of any amounts actually disbursed by WF, it is our position that WF has breached the terms of the LA on multiple points. We have attempted to discuss this matter with the appropriate personnel at WF via telephone on numerous occasions and have repeatedly been denied contact information for anyone in the department which administers the insurance coverage requirements under WF 's loan agreements. As such, we are respectfully requesting the CFPB 's assistance in resolving this matter. 

Additionally, our credit report now shows an increase in debt outstanding due to WF reporting the escrow balance as new debt, which has negatively impacted our credit score. We are requesting CFPB 's assistance on this matter as well. 

Finally, WF 's website now shows our current insurance policy as having an effective date of XX/XX/XXXX and an expiration date of XX/XX/XXXX. This is inaccurate as our current policy, which WF has previously acknowledged both receiving and accepted ( and reflected same on its insurance verification portal ), has an effective date of XX/XX/XXXX and an expiration date of XX/XX/XXXX. As we have been prevented from speaking with anyone at WF about these matters, we are requesting CFPB 's intervention on this matter as well. 

Thank you very much for your prompt attention to this matter, and please let us know if any additional information may be required to assist in your efforts.