Consumer complaint received 2024-04-16
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — Escrow, taxes, or insurance
Company: Shellpoint Partners, LLC (VA)

NewRez, my mortgage company, used predatory and unethical practices to buy insurance for on my mortgage. 

I received a letter on XX/XX/2024 that says : " We have not received proof of hazard coverage on the above referenced property as required under the terms of your mortgage and as requested in previous notices. Because of this, it has become necessary to place lender-placed insurance coverage on your property. '' Yet, I have already sent them my owners policy. They have a copy. 

I called and apparently they are referring to my HOA 's insurance policy. But, that's not what the letter says! It's 100 % misleading. I thought I was already in compliance. 

Also, when NewRez bought insurance on my behalf, certain disclosures should be provided. 
1. How much have you charged my escrow account? 
2. What does the policy cover? NewRez purchase an HOA insurance policy -- which I am only responsible for a fraction of, right? Am I now paying for the entire building 's coverage? 
3. What efforts has NewRez made to get the HOA insurance policy proof of coverage? They know how to do this. They have the information. Or they can look up the property management company and get it themselves. How is it possible that after serving my loan for 4 years, now it's suddenly out of compliance? Why did NewRez not get ahead of this and get a copy of the renewal? 
4. Most importantly, what kickbacks, commissions, and incentives has NewRez received for arranging lender-placed insurance coverage on my property. Clearly there is a conflict of interest. They profit from lapses in insurance and create consumer frustrations on purpose. 

NewRez sent me a vague letter ( not specifically requesting the HOA 's policy ), arranged lender-placed insurance coverage on my property, and made no effort to get the coverage information from the HOA themselves. 

They have the information and means to track my HOA 's insurance, and get the necessary updated statement of coverage themselves. Yet, they have no problem charging my escrow account and disclosing no information about the policy purchase on my behalf. 

This is fraud. This is predatory. 

I am an owner of two condos that are serviced by NewRez. This exact same situation happened with my other condo as well. This is a deliberate and intentional practice of deception and fraud by NewRez. 

Look at the enclosed letter from XX/XX/2024. No where in the letter does it state that they are missing my HOA policy, or what they have done to get the information needed. I know they have my latest owner 's policy because I have evidence of sending it to them on XX/XX/2024. 

I have worked with many XXXX XXXX over the years. Mortgage companies establish connections with insurance providers. In my experience, only NewRez intentionally requires a manual process of updating insurance -- and is shady with disclosures and potential kickbacks and conflicts and changes made to my escrow because of their own incompetence. 

NewRez profits from predatory and unethical practices to buy insurance on behalf of its customers and should be investigated and dealt with. 

https : //www.newrez.com/