Consumer complaint received 2023-01-20
Product: Mortgage — FHA mortgage
Issue: Trouble during payment process — 
Company: M&T BANK CORPORATION (MA)

I purchased my home in XXXX of XXXX with XXXX XXXX XXXX  ( XXXX ) as the lender. The mortgage amount to be paid monthly was set at {$1300.00} per month. In XXXX of XXXX I set up an automatic payment with my bank ( XXXX  XXXX ) paying {$1500.00} which was to be withdrawn from my checking account on the XXXX of every month to be sure ( XXXX ) would receive the payment in a timely manner on the XXXX of every month which would apply {$1300.00} to the minimum amount due and {$190.00} towards the principle. This was set up to continue till the end of the loan. In XXXX of XXXX, I was sent notification that my Hazard insurance was not paid and if I had not paid that insurance by a specific date then I would be subjected to " lender '' placed insurance which would be far more expensive and would offer less benefits than my original insurance company. This being my 1st mortgage was confusing to me and I thought originally that the mortgage company was to be paying it on my behalf with funds that were in escrow. I was told that I had opted to pay for my own insurance and would be responsible to maintain the insurance separate from my mortgage. I contacted my Insurance company ( XXXX ) and paid in full for the year forthwith. Both myself and the insurance company sent out the evidence they requested to show that the insurance had not been canceled. In XX/XX/XXXX, I received a letter from XXXX that they had sold the account to M & T Bank ( M & T ) and they forwarded my XXXX payment to M & T but that my new monthly payment would be {$1500.00} which was stated on my 1st statement from M & T.. Obviously, the increase got my attention and I called M & T to see what happened to increase my monthly obligation. In this original conversation, M & T claimed that XXXX had sold them the mortgage with my PIM, Hazard insurance, as well as taxes that were all to be paid out of escrow. M & T claimed that they had not known that I was paying the insurance on my own since the beginning of the loan. However, they promised to look into the issue. In the meantime, I reached out to XXXX insurance department and it was told to me that they would send me a refund for the monies that were charged to me in error which was for the " Lender Placed " hazard insurance paid out to ( XXXX XXXX XXXX XXXX ) in the amount of {$1300.00} which they had charged me before the sale to M & T but yet the remaining monies {$930.00} they claim was forwarded to M & T ( which had already been taken from my escrow for the lender placed insurance ) who then claimed to apply it towards the principle of the loan. I called M & T again to check on that and they claimed that they would refund me {$3500.00} which was overpaid since they purchased the loan but promised to do another escrow analysis which should then get it right. This is when I found the 2nd issue which I'll write about a little later. However, when they ran the escrow analysis, they still ran the Hazard insurance premiums as part of my monthly payment which failed to correct the problem. However, they now state that my new monthly obligation would be {$1400.00}. This is wrong. The problem is, who is at fault and how do I correct it. M & T has refused to correct the issue, and state the issue was with XXXX who states they no longer service the loan and don't have the ability to help either. The facts are, I paid {$3000.00} per month since the very beginning of my loan, which was never my intention. It appears they were collecting {$1500.00} from Bill Pay on the XXXX of every month and then they were collecting another {$1500.00} from Autopay on the XXXX of every month. They claim that it is common practice for people to pay down their mortgage and since I never bounced a check, it never raised a flag to them that this was not my intention. So, here I am now in XXXX, after nearly 12 hours of phone conversations and seem to be getting nowhere, I feel as though I need some assistance to correct the issues. This situation is causing me a lot of stress and cant seem to get them resolved. I can't see how this can be resolved. M & T is adamant that they are to collect monies in my escrow for my insurance, though it has already been paid, as I had from the onset. So, here I am overpaying almost {$40000.00} in just over 2 years, and then penalized another $ XXXX per month only because XXXX chose to sell the mortgage to M & T XXXX I have tried calling both XXXX and M & T several times since the error was noticed and as of XX/XX/XXXX I have not been refunded any money as promised nor has the account been corrected. I don't see how this is right or legal, and would like to know how to best move forward in resolving the issue and if possible getting the monies that were collected in error, returned back to the account it was taken from. So, to clarify, I have 2 issues. The overpayments that were paid monthly, {$1500.00} per month since XXXX of XXXX. They claim that it helped me to pay down the principle and will only help me later. My argument is that I should be able to decide that for myself and not be forced to go along with the error. How that was missed was the payments were taken usually within 4-5 days of the other, which allowed this to continue for as long as it did. The 2nd issue is the hazard insurance portion of the loan. I think it is clear evidence that I was responsible for the hazard insurance from the beginning, hence the warning and subsequent charge for the lenders placed insurance which was promised to be refunded, ( yet I have not yet received ) from XXXX. Should M & T who purchased the loan from XXXX honor the terms that were made? What would my recourse be? I feel as though this can be a much bigger issue than just myself and can really impact the average homeowner in a negative way. I am so upset and feel helpless in resolving it with the company.