Consumer complaint received 2024-05-28
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — Escrow, taxes, or insurance
Company: Mr. Cooper Group Inc. (NC)

On XX/XX/XXXX, I closed on a home funded by forming a relationship with XXXX Mortgage as my mortgage lender and XXXX XXXX XXXX as the home insurance provider. 

Within 2-3 months, Mr. Cooper bought out the loan from XXXX Mortgage and became my new mortgage lender and escrow account manager. 

On XX/XX/XXXX, XXXX XXXX XXXX was due a policy renewal distribution from my escrow account. However, the payment from Mr. Cooper 's escrow department was not distributed until XX/XX/XXXX. Because of the late payment, it was later discovered that XXXX XXXX canceled my insurance policy coverage for my home. 

Late XXXX of XXXX, I received a Cancellation of Coverage notification in the mail from XXXX XXXX with a check of the balance sent by Mr. Cooper on XX/XX/XXXX, explaining that my payment was late and they would not allow me to renew my policy ( I suspect because I had an open claim with XXXX at that time for an issue not found during the home inspection but manifested almost immediately upon taking possession of the home ). In my discourse with Mr. Cooper at this time, they demanded my immediate course of action was to get current-day home coverage as soon as possible to be in good standing, and did not inform me that there would be penalties if there was a gap in insurance coverage dates ( i.e. that I must also secure backdated coverage ). Over the course of the next month and the guidance of Mr. Cooper, I worked to secure quotes and find an underwriter for a new home insurance policy -- eventually going with XXXX XXXX XXXX  effective XX/XX/XXXX, inferring nearly a 4-month gap of home insurance coverage. 

Investigations with Mr. Cooper over what happened was that a Hazard Insurance payment for the amount owed for renewal of the XXXX policy was issued on XX/XX/XXXX to a XXXX XXXX XXXX  -- the wrong insurance provider. It was only after XXXX XXXX XXXX  refunded the incorrectly distributed funds back to Mr Cooper on XX/XX/XXXX that Mr Cooper attempted to correct their mistake via the XX/XX/XXXX late distribution to XXXX. By then, XXXX was disinterested in renewing my policy and had proceeded with cancelations. 

On XX/XX/XXXX, I received a letter from Mr. Cooper issued XX/XX/XXXX saying that because there was a lapse in insurance coverage from XX/XX/XXXX when the policy ended with XXXX XXXX to XX/XX/XXXX when I started coverage with XXXX XXXX XXXX, they had purchased a gap policy via XXXX XXXX. This gap policy was paid from my escrow account for that 4-month lapse. 

Today, on XX/XX/XXXX, after hours of cyclical customer service misrouting which included speaking to 10+ members of Mr. Cooper 's customer service staff and associated partnerships ( including escrow and insurance departments ), they refuse to take accountability for their clerical error which I've suffered cascading losses : financial ( excess costs in premiums -- both the difference in premiums between XXXX and XXXX XXXX XXXX for the same coverage having been forced to secure a new vendor ; and for this gap insurance policy ), risk ( a gap in coverage in which damage could have happened to the home for which it was not insured ), and time ( spent trying to investigate this issue with Mr. Cooper XXXX XXXX XXXX XXXX XXXX securing a new insurance policy ).