Consumer complaint received 2021-05-10
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — 
Company: HAMILTON GROUP FUNDING, INC. (FL)

The purpose of this letter is to request a corrected Escrow Analysis Statement that does not force us to pay for lender forced insurance that was not actually in existence from XX/XX/2021 XX/XX/2021 since the lender forced insurance was purchased on XX/XX/2021, and we are not able to back date our homeowners insurance policy to XX/XX/2021 because every insurance agent says that backdating insurance policies is illegal. 

BACKGROUND INFORMATION On XX/XX/2021 we forwarded a copy of our homeowners insurance policy to Hamilton Home Loans ( Hamilton ) after receiving a letter from Hamilton requesting proof of coverage. ( Email to Hamilton, attached ). 

On XX/XX/2021, we received a response from Hamiltons Servicing Manager, Mr. XXXX XXXX stating that Hamilton received our current declarations page for our homeowners insurance policy and that they were updating our account. On this same date we asked whether Hamilton would not purchase insurance on our behalf and whether the notices would stop. On the following day, Mr. XXXX XXXX confirmed that the insurance would not be purchased and that notices would stop. ( Email from Hamilton, attached ). 

On XX/XX/2021, we contacted Hamilton again because we received another notice in the mail stating that insurance would be purchased on our behalf. We asked, again for confirmation of the steps that needed to take place to prevent this from happening since we had already provided proof of insurance and received confirmation that our coverage was sufficient. On XX/XX/2021, Hamiltons Servicing Manager provided the following : The current homeowners insurance policy has been received and as of XX/XX/2021 the notices for placing lender placed insurance have stopped. If the letter you received is dated prior to XX/XX/2021, please disregard. 

( Emails between Hamilton, attached ). 

Despite all of our efforts via numerous phone calls and emails to ensure Hamilton had proof of our coverage, that our coverage was sufficient, and that Hamilton would not purchase coverage on our behalf, on XX/XX/2021, we received an email from Hamilton stating that a homeowners insurance policy was purchased on our behalf for {$5000.00}. We immediately contacted XXXXamiltons Servicing Manager MrXXXX XXXX XXXX to assist. After days of trying to contact Hamilton, Mr. XXXX, and speaking and emailing Hamilton, MrXXXX XXXX finally replied on XX/XX/XXXX with the following : You can reach the escrow department by contacting XXXX. The escrow department did confirm on Monday that they received your evidence of windstorm insurance and your loan is no longer in the lender placed insurance queue. He also stated : Customer service manager confirmed the policy was cancelled and any charges were voided. 

Mr. XXXX indicated that a notice would be sent regarding the aforementioned. However, a notice was never received and the refund was never issued. 

( Emails between Hamilton, attached ). 

Once again, we spent several hours over several days calling Hamilton to understand what was going on. We learned that all the information provided to us was incorrect and we diligently obtained the coverage necessary and again provided it to Hamilton. Although Hamilton purchased their forced-placed insurance on XX/XX/2021, XXXX has indicated that the coverage existed since XX/XX/2021 when in fact there was no coverage dating back to XX/XX/2021. Hamilton is forcing us to pay for coverage that was not actually in place. 

APPLICABLE LAW 12 CFR 1024.37 ( b ) provides that a servicer may not assess on a borrower a premium charge or fee related to force-placed insurance unless the servicer has a reasonable basis to believe that the borrower has failed to comply with the mortgage loan contracts requirement to maintain hazard insurance. 
12 CFR 1024.37 ( h ) ( 1 ) provides in summary that all charges related to force-placed insurance assessed to a borrower by or through the servicer must be bona fide and reasonable. 

The statute defines a bona fide and reasonable charge as a charge for a service actually performed that bears a reasonable relationship to the servicers cost of providing the service, and is not otherwise prohibited by applicable law. 

APPLICATION OF LAW TO FACTS Hamilton did not have reasonable basis to believe that we had failed to comply with our mortgage contract and maintain hazard insurance. We did everything on our part to provide our proof of insurance and received in return assurance from Hamiltons Servicing Manager and other phone representatives that our insurance was sufficient, that no insurance would be purchased on our behalf and that a refund would be issued for the forced-placed insurance. 

Furthermore, Hamiltons charge for force-placed insurance is not bona fide and reasonable. Hamilton purchased the lender-placed insurance on XX/XX/2021 and is forcing us to pay for coverage dating back to XX/XX/2021. This is not bona fide and not reasonable because this coverage was not actually performed or in existence from XX/XX/2021 XX/XX/2021. We attempted to purchase coverage for these dates and all insurance agents indicated that this is illegal and fraudulent. 

As a result, we are requesting that Hamilton conduct a corrected Escrow Analysis Statement that does not unjustifiably force us to pay for the force-placed insurance for the dates when the insurance policy was not actually in place XXXX XX/XX/2021 XX/XX/2021 ).