Consumer complaint received 2019-08-05
Product: Mortgage — FHA mortgage
Issue: Trouble during payment process — 
Company: Freedom Mortgage Company (FL)

Date : XX/XX/XXXX To : FREEDOM MORTGAGE ATTENTION : XXXX XXXX XXXX XXXX   XXXX XXXX, IL XXXX FAX XXXX From : XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX, FL XXXX Re : Error Resolution Notice under 12 C.F.R. 1024.35 Mortgage Loan Number : XXXX I am writing to request correction of the error described below in regard to the mortgage on my property at XXXX XXXX XXXX XXXX, XXXX XXXX, Fl XXXX I have attached some helpful explanation of the Federal Laws That Cover Force-Placed ( Lender-Placed ) Insurance so you can see your error and please RE-DO an ESCROW ANALISIS because I believe that this was done incorrectly into my account. 
I received a letter from Freedom Mortgage dated XX/XX/XXXX titled Notice of LENDER placed insurance for date XX/XX/XXXX. The total amount for this insurance is {$2400.00} for XXXX XXXX XXXX XXXX. I called on XX/XX/XXXX to cancel this insurance as I had already placed an HO6 on XX/XX/XXXX. All of your letter were incoherent and incorrect. They were going to issue a refund, but I didnt think it was going to be THROWN back into my ESCROW SHORTAGE. I believe this to be a mistake. 
The reason for my letter is because this total {$2400.00} was applied to ESCROW SHORTAGE making my mortgage go up about {$400.00} when I already had insurance. This error of force placing insurance DOES NOT follow FEDERAL REGULATIONS, because NEVER before XX/XX/XXXX did I receive any notices or warning from FREEDOM MORTGAGE that you were placing an insurance RETROACTIVELY. This insurance was placed RETROACTIVELY because I never received any notices before XX/XX/XXXX. The first and only notice I received regarding not having HO6 was on XX/XX/XXXX. And on XX/XX/XXXX I placed FEDERAL NATIONAL XXXX insurance. 
If you read the attachment the LENDER cant under FEDERAL LAW place any LENDER PLACED INSURANCE without sending 2 notices, 45 days prior to forcefully placing the LENDER INSURANCE. Please revise all my phone calls, all my notices, all my letters sent from you to me and please revise my account, and please withdraw this money from my SHORTAGE SO I CAN KEEP ON DOING MY NORMAL MORTGAGE PAYMENTS OF {$1600.00}. 
In accordance with the FEDERAL LAW ( see attached ) you have 15 days to fix your error or I will have to contact an attorney to resolve this matter. 

If you need to contact me, I can be reached at XXXX or my work number at XXXX or my email XXXX Sincerely, XXXX XXXX Federal Laws That Cover Force-Placed ( Lender-Placed ) Insurance Federal law restricts when and how a servicer can require you to pay for expensive insurance coverage that it buys on your behalf. 
As of early XXXX, a servicer can't buy force-placed insurance unless there is a reasonable basis to believe that the borrower has failed to maintain insurance coverage in accordance with the requirements of the loan documents. In addition, homeowners are entitled to receive certain notices before the servicer purchases the force-placed insurance policy. 
Under federal law, the servicer must reasonably believe that the borrower has failed to maintain insurance coverage on the home before purchasing a force-placed insurance policy. For example, if the borrowers insurance agent or provider contacts the servicer to inform it that the bill is overdue, this would provide a reasonable basis for the servicer to think that there is no coverage. 
The servicer must then send two notices to the borrower prior to obtaining force-placed insurance. The notices must request that : the borrower obtain hazard insurance for the property, and the borrower submit proof of insurance ( such as a copy of the insurance policy declaration page, an insurance certificate, or the policy ) to the servicer. 
Timing of the Required Notices The servicer must send the first notice at least 45 days before purchasing a force-placed insurance policy. 
The servicer must then send a second noticea reminder noticeno earlier than 30 days after the first notice and at least 15 days before charging the borrower for force-placed insurance coverage. This notice must include the cost of the force-placed insurance or a reasonable estimate of the cost. ( 12 C.F.R. 1024.37 ). 

If the Loan is Escrowed, the Servicer Must Generally Pay the Existing Policy The servicer generally must keep an existing insurance policy in place if the borrower has an escrow account from which the servicer pays the insurance billeven if the servicer needs to advance funds to the borrowers escrow account to do this. 
What Happens if the Borrower Provides Proof of Insurance Coverage If the borrower subsequently provides evidence that he or she has insurance coverage in place, the servicer must : cancel the force-placed insurance within 15 days of receiving evidence of existing insurance, and refund any premiums charged for duplicate coverage to the borrower. ( 12 C.F.R. 1024.37 ). 
What to Do If Your Servicer Improperly Force-Places Insurance on Your Property If your servicer improperly force-places insurance on your home, you can send the servicer whats called a notice of error. Under federal law, if you send your servicer a notice of errorbasically, a letterletting the servicer know that it made a mistake on your account, the servicer is supposed to fix the mistake within a specific time period