Consumer complaint received 2020-11-05
Product: Mortgage — FHA mortgage
Issue: Struggling to pay mortgage — 
Company: GATEWAY FIRST BANK (TX)

To whom it may concern, I believe our FHA loan was processed and handled incorrectly.This is mine and my husband 's 1st home purchase. My concern is only being brought up after the renewal date of our flood insurance as of XXXX XXXX. Our flood policy was written prior to our closing and " approved " by the underwriters at Gateway Mortgage Group in XXXX XXXX, Texas. Not at any time prior to closing were we advised of the flood " conditions '' or cost, other than the quote from our seller and the quote from XXXX XXXX XXXX, of this property, other than by the owner, she told us in XXXX it had 4inches of water to the kitchen, yet she was so afraid of the mold she remodeled the entire house. She even provided us with a flood insurance quote, so we would know how much the insurance would cost. That quote was handed over to our loan officer. We did not go through the quote she recommended, but through XXXX XXXX XXXX which our loan officer recommended, who got an even better quote for us. That was that about the flood insurance, nothing more was discussed. Nothing was told or advised to us about previous claims, or the fact that the flood policies we had DID NOT meet FEMA or FHA requirements, or that Gateway was going to " allow '' the flood policy from XXXX for 12mo. Now, with that said, The night before closing, our loan officer calls about XXXX and says " We forgot about your flood insurance, you need to bring XXXX more dollars to closing tomorrow ''. We did. At closing the lady at XXXX XXXX told my husband what each page was, and to sign. No detail of any page. We closed, things were final, we left, happy family. In XXXX or XX/XX/XXXX I received a letter from Gateway stating they have not received our flood insurance policy yet ( that they are responsible for payment for, you would have thought they would have gotten the policy copy for the receipt? ) and that they were going to place insurance if not received. I faxed them what XXXX, our flood insurance agency, had sent us. A few weeks later Gateway sent a document stating a notice of lender placed insurance effective XX/XX/XXXX to XX/XX/XXXX for an insured amount of {$900.00} for flood zone AE CHRA with an annual premium of {$230.00} including taxes and fees was being put in place by Gateway Mortgage. I called them and had to refax the XXXX policy and eventually a few days later they removed the lender placed flood insurance and I received the confirmation letter of them doing so. This would have been the second time that Gateway would have " reviewed '' my flood insurance policy. In XXXX of XXXX, I began receiving notices from XXXX about policy renewal, which I paid no attention to since we have an escrow account, Gateway would pay it. In XXXX I began receiving cancelation notices from XXXX for non-payment. I called Gateway and asked why it hasn't been paid, and the customer service man I spoke with, Amid, stated he didn't see XXXX as my policy holder. but XXXX XXXX XXXX, and " things '' just didn't look right. He saw multiple policies on our account. He attempted to call XXXX but got no answer. After a few days I called XXXX and asked if anyone from Gateway had attempted to contact them and the lady said she believed another lady in the office was working on it, but that the policy had been canceled as of XX/XX/XXXX for nonpayment and that I needed to contact Gateway again. The lady informed me that Gateway has actually made the payment for the renewal and then put a stop payment on it. I called Gateway back and got a different person, who began to explain to me that the XXXX policy we had did not meet FEMA requirements, and that Gateway only allowed the policy for 12mo and after that I was required to get FEMA approved flood insurance. I don't see how Gateway is able to bend any rules, and if they accepted the policy the first time why not every time? They told me that Gateway would place flood insurance on the property until I got an approved policy. This was a major concern for me at this time due to Hurricane Marco heading our way, but they assured me we were covered in the event of a flood. The lady gave me the website to FEMA Floodsmart and told me I needed to find a policy and they would lift the lender placed insurance. What I don't understand is how Gateway has the ability to have flood insurance on my property, but I am being denied? I contacted my insurance agent and let him know, and he started the search. A few days later I received a bill from Gateway stating my mortgage note was going from {$1900.00} to {$2800.00} for the next 12 months to fix the escrow account and recover their expense ( which i don't see how any family could ever possibly adjust to ) due to a shortage in our escrow account. Which also means, that IF we do get a flood insurance policy, it will still put our mortgage note beyond our means of paying, which would have also been realized before closing.Obviously I immediately contacted Gateway and asked for an explanation of the shortage. I was told by the escrow department, that {$4100.00} was " paid out of their pocket, and they had to recover their money since our escrow account did not have it ''. I do not understand how our escrow account was not " prepared '' for the 2nd year of our loan, including our flood insurance if Gateway knew I was only going to have the flood insurance policy the loan was approved with, for 12mo, and after that the flood insurance would increase.With no other explanation, she said I would need to speak to the insurance department, and I told her I have already, but transferred anyway and was told the same thing about the 1st policy only being allowed for the 1st 12mo and now I have to get a new one. So, due to my husband being unemployed still from covid and me only bringing home {$500.00} a week already struggling, we decide we have no choice but to sell our dream home. We get in touch with a local real estate agent and give her our situation. So, in order for her to be able to sell our home, she needs to know the cost of the flood insurance, and she starts calling for quotes on the property. She is immediately declined due to " repetitive claims on the property ''. She tries a few other companies including her flood insurance company who is FEMA approved, XXXX insurance. They declined for the same reason. I called my insurance agent to see what results he came up with and he is also being declined for the same reasons, and files with the Repetitive Loss Department through FEMA. We still have not heard back from that department. As of today, the only flood insurance I have is the lender placed by Gateway who won't even cover my personal property for the amount they are charging. A few days pass and the real estate agent calls to inform me not only are we being declined flood insurance on an FHA loan that is required to have it, in XX/XX/XXXX, FEMA has rezoned my property from high risk, to a Floodway, and she doesn't think she will be able to sell our house. I obviously freaked out and broke down wondering what we were going to do. If we would have known all of this before we closed or even in the process of buying, we would have NEVER picked this house. We were already approved for the loan, we would have picked a different house AND known what to be looking for when it came to the flood insurance or flood map. As 1st time home buyers we were clueless of it all. I contacted lawyers, professionals, friends in the field, and everyone feels the same as I do, this loan should have never been approved if the flood insurance did not meet requirements, somebody should have caught the fact that flood insurance for this property address would be difficult or impossible to acquire and brought to our attention prior to buying this home. Now here we are only 1 year into our 1st year of home ownership and we have been put in a situation of no return and it feels as if no help. I feel as if Gateway Mortgage failed in informing us on these conditions and circumstances and have put my family in a horrible situation and I think they should have to buy this loan back, return all of our money and they should be the ones " stuck '' with this home in this situation and be told " best of luck to you ''. I do not know what other information you need from us, please just let me know. Please respond back either way. 

Thank you for your time and understanding, XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX 
XXXX, Texas XXXX Gateway Mortgage Company Loan # XXXX FHA Case # XXXX