Consumer complaint received 2023-05-12
Product: Mortgage — FHA mortgage
Issue: Trouble during payment process — 
Company: Dovenmuehle Mortgage, Inc. (FL)

During Hurricane Ian, the Complainant sustained damage to his property and opened a claim with his homeowner 's insurance company, seeking compensation for Coverage B Other Structure, Coverage C Personal Property, and Reimbursement for Additional Expenses. 

Due to the excessively high volume of Hurricane Ian claims and resultant lengthy processing times, the Complainant and insurance company entered into negotiations in good faith, culminating in a settlement and release agreement. The agreement provided a total payment of {$41000.00}, which covered all losses for which Plaintiff was eligible. 

The Complainant insurance company issued a check for {$41000.00}, which included payments for Coverage B Other Structure ( {$8000.00} ), Coverage C Personal Property ( {$23000.00} ), and Additional Expenses ( {$9600.00} ). 

Upon receipt of the insurance company 's check, Complainant contacted XXXX the mortgage servicer for his property, via telephone. 

Following XXXX 's instructions, Complainant endorsed the insurance company 's check, included required documents and a prepaid label for its return via the United States Postal Service priority mail to Defendant. 

Complainant received an initial correspondence from Defendant on XX/XX/XXXX, which set out the process for disbursing the insurance proceeds. The correspondence stated that if the Total Loss Proceeds ( T.L.P. ) were less than or equal to {$10000.00} and all necessary documentation was provided, XXXX would issue a check for the total loss within XXXX business days. 

Complainant provided XXXX with all required documentation no later than XX/XX/XXXX. 

Complainant promptly responded to all additional requests for information made by XXXX, including a copy of the settlement and release, self-repair affidavit, personal property inventory list, adjuster report, two prepaid overnight labels, and direct deposit information. 

The XXXX. is calculated solely on the portion of the insurance proceeds for which the lender has a security interest, except for a total loss or an agreement to the contrary. Neither of these exceptions applies to the Complainant 's situation ; therefore, the Complainant 's XXXX. is {$8000.00}. 

The Security Instrument executed between the parties on XX/XX/XXXX, defines the DMIs security interest, which is limited exclusively to the " real property serving as collateral for the loan, along with all improvements, easements, appurtenances, and fixtures now or hereafter a part of the property, '' including all replacements and additions. 

Personal Property and Reimbursements should not included in the XXXX. calculation and should not be included in the Complainant 's XXXX. calculation. The Complainant 's XXXX. is {$8000.00}. 

As an XXXX. lender, XXXX must promptly release all insurance settlement proceeds received for coverage of the XXXX 's XXXX XXXX, temporary housing, and other transition expenses to the XXXX. 

XXXX has not disbursed the total insurance proceeds under {$10000.00} to XXXX. Instead, XXXX has only disbursed {$370.00}, less than 5 % of the XXXX. of {$8000.00}, in contrast to the process outlined in the initial correspondence. 

In reliance on the validity of XXXX 's insurance proceeds disbursement process, as outlined in the initial correspondence, XXXX commenced and completed most of the patio replacement work at his own expense. 

Upon XXXX 's inquiry about the remaining XXXX. funds, XXXX requested XXXX information, estimates, and inspection scheduling, despite previously approving self-repair and not required per the process outlined by XXXX if XXXX T.L.P. is less than {$10000.00}. 

Complainant has provided photographs of the newly laid concrete slab and receipts totaling {$8000.00} for the patio cover and needed materials to install the slab. 

Despite receiving all required and not required documents and in contrast to the initial correspondence, XXXX refused to release the T.L.P. until after an inspection, EVEN THOUGH the T.L.P. is less than {$10000.00} and much more than XXXX business days have elapsed. 

XXXX 's failure to disperse the remaining {$7700.00} within XXXX business days has forced XXXX to endure unnecessary expenses, causing undue hardship for him and his family. 

As a result of XXXX 's actions, Complainant has suffered actual damages, including but not limited to the inability to fully repair his damaged property, loss of use of his property, and significant undue financial hardship for having to come out of pocket for cost. 

The undue and unnecessary financial hardship had detrimentally impacted the Complainant and his familys well being, causing stress, anxiety, and XXXX. It has lead to a decreased quality of life, and negatively affect relationships. Also to the loss of opportunities for personal growth and development. 

XXXX has violated the Real Estate Settlement Procedures Act, XXXX XXXX. XXXX et seq. ( " RESPA '' ), by failing to promptly disburse insurance settlement proceeds received for coverage of XXXX 's personal property and additional expenses, as required by XXXX XXXX. XXXX ( k ). 

XXXX 's failure to disburse the total amount of the insurance proceeds under {$10000.00} to XXXX, per its initial correspondence, is a violation of XXXX XXXX. XXXX ( k ) ( XXXX ) ( A ). 

XXXX 's conduct in requiring additional documentation and an inspection for the disbursement of the remaining insurance proceeds, despite having already approved self-repair and having received all the necessary documentation, is a violation of XXXX XXXX. XXXX ( k ) ( XXXX ) ( B ). 

XXXX is subject to TILA, XXXX XXXX. XXXX et seq. XXXX requires that, among other things, lenders disclose the cost of credit, including finance charges and the annual percentage rate ( A.P.R. ). XXXX violated TILA by failing abide by the disclosed the terms and conditions for disbursement of the insurance settlement proceeds and the calculation of the T.L.P. 

XXXX failed to disclose that it would only disburse a small percentage of the XXXX, despite receiving all required documentation and the T.L.P. being less than {$10000.00}. 

XXXX conduct constitutes a violation of XXXX, XXXX XXXX. XXXX et seq. 

XXXX engaged in unfair and deceptive trade practices by failing to disburse the insurance proceeds under {$10000.00} to XXXX, despite receiving all required documentation and the XXXX. being less than {$10000.00}. 

XXXX also engaged in unfair and deceptive trade practices by requesting additional information and inspection scheduling after previously approving self-repair and not requiring XXXX. disbursement if it is less than {$10000.00}, although the fact that the XXXX. being less than {$10000.00} and much more than XXXX business days have elapsed. 

DMIs actions were likely to mislead a reasonable consumer. 

Complainant and XXXX entered a contract by which XXXX agreed to service the mortgage on XXXX 's property. 

According to the contract, XXXX agreed to release the insurance settlement proceeds to Complainant for coverage of XXXX 's XXXX XXXX, temporary housing, and other transition expenses. 

XXXX has breached the contract by failing to release the remaining XXXX. funds to Complainant within XXXX business days as outlined in the initial correspondence, despite receiving all required documentation and Complainant has had to commenced and completed most of the patio replacement work at his own expense. 

XXXX owes XXXX a fiduciary duty to act in XXXX 's best interests regarding the disbursement of insurance proceeds for coverage of a XXXX 's XXXX XXXX, temporary housing, and other transition expenses. 

XXXX has breached its fiduciary duty to Complainant by failing to promptly release the insurance settlement proceeds if the T.L.P is less than {$10000.00} within XXXX business days as disseminated by XXXX 's as their state loss proceeds distribution process. 

XXXX breached its fiduciary duty to Complainant by requiring unnecessary inspections and documents, despite previously approving self-repair and not requiring XXXX. if it is less than {$10000.00}. 

XXXX breached its fiduciary duty to Complainant by failing to act in XXXX best interests and by causing Complainant undue hardship, which could have been avoided if XXXX has acted promptly and in good faith. 

XXXX owed a duty of care to Complainant o disburse the insurance proceeds per the mortgage agreement terms, process outline and applicable law. 

XXXX breached this duty of care by failing to disburse the total amount of the insurance proceeds to Complainant promptly and adequately, despite Complainants compliance with all requests for documentation. 

XXXX 's breach of duty of care caused XXXX to suffer damages, including but not limited to the inability to fully repair his damaged property, loss of use of his property, and significant undue financial hardship. 

XXXX 's breach of its duty of care was the proximate cause of XXXX 's damages. 

XXXX XXXX conduct was negligent and reckless and showed a conscious disregard for Complainants right and laws. 

XXXX 's conduct constituted negligence per XXXX under Florida law, as XXXX violated its duty of care under the applicable federal and state laws, regulations, and guidelines. 

DMIs conduct resulted from its negligence, gross negligence, and willful misconduct. 

XXXX has been unjustly enriched at XXXX 's expense by failing to disburse the remaining Total Loss Proceeds ( T.L.P. ) under the XXXX XXXX and Florida law. 

XXXX has received the insurance settlement proceeds from Complainants insurance company and has failed to disburse the remaining XXXX. within the timeframe provided for in the initial correspondence. 

XXXX has failed to release the T.L.P. as outlined in the initial correspondence, instead delaying, and impeding the disbursement process by imposing additional requirements and scheduling an unnecessary inspection. 

XXXX 's retention of the remaining XXXX. without justification constitutes unjust XXXX knew or should have known that its actions would result in XXXX 's undue hardship, yet XXXX has continued to act disregarding XXXX 's rights and interests. 

XXXX has benefited from its retention of the XXXX. at the expense of XXXX. 

XXXX retention of the remaining XXXX. under the circumstances described herein is inequitable, unjust, and against the principles of fairness and equity.