Consumer complaint received 2021-02-02
Product: Mortgage — FHA mortgage
Issue: Trouble during payment process — 
Company: FIFTH THIRD FINANCIAL CORPORATION (KY)

Private flood insurance policy renewed with escrow payment from 5/3 bank to XXXX XXXX, XXXX XXXX  XXXX for the XX/XX/XXXX to XX/XX/XXXX term. Insurance policy was in effect for all of XXXX - no lapse in coverage since 5/3 paid the insurance in full for the year of XXXX. 

XX/XX/XXXX : Notice of Flood Insurance Requirement from 5/3 Bank sent to homeowner stating that our current flood insurance policy with XXXX XXXX, XXXX XXXX  XXXX, does not meet the FHA guidelines for our home loan and we have 45 days to find new policy before it renews on XX/XX/XXXX. No other communication was sent prior to XX/XX/XXXX about non-compliant insurance policy. 

XX/XX/XXXX : Private flood insurance policy with XXXX XXXX, XXXX XXXX XXXXXXXX, was paid from 5/3 escrow account even though we received a letter in the mail on XX/XX/XXXX stating this policy was non-compliant under FHA Guidelines. 

XX/XX/XXXX : New NFIP policy with XXXX XXXX paperwork sent to 5/3 lender and paid in-full ( new NFIP policy was NOT paid with escrow ). Confirmation on 5/3 account that new policy meeting NFIP guidelines was received. 

XX/XX/XXXX : New NFIP policy with XXXX XXXX active. 

XX/XX/XXXX : Evidence of Insurance letter from 5/3 sent to us stating that a lender-forced flood insurance policy with XXXX XXXX XXXX XXXX XXXX XXXX was taken out for our home even though we had confirmation that our NFIP policy with XXXX XXXX was received on XX/XX/XXXX and effective on XX/XX/XXXX. The letter was back-dated showing that the policy with XXXX XXXX XXXX XXXX XXXX XXXX was active from XX/XX/XXXX - XX/XX/XXXX without out knowledge ( no prior notices received that there would be a lender-forced policy on our account for the year of XXXX ). 

XX/XX/XXXX : Mortgage Annual Escrow Analysis from 5/3 sent to us stating our escrow was negative by - {$150.00}. Paid in full on the phone and received confirmation number. Account reflects that this was applied. 

XX/XX/XXXX : {$1700.00} taken from escrow to pay for lender-forced flood insurance policy from XXXX XXXX XXXX XXXX XXXX XXXX, even though we had sent notification of new NFIP Policy with XXXX XXXX on XX/XX/XXXX that was paid in-full and not from escrow. 

XX/XX/XXXX : Private insurance policy with XXXX XXXX, XXXX at XXXX cancelled for the XXXX term. Have yet to receive refund for this policy from insurance company. 

Week of XX/XX/XXXX : Insurance representative with XXXX XXXX insurance, XXXX XXXX, called 5/3 and put me on the line. Spoke to a woman in Escrow Department at 5/3 who told me to ignore any future communications about the force-placed lender insurance policy from 5/3, that it was cancelled and wasn't even showing on her end as an active policy, and that the money would be returned to our escrow account. 

XX/XX/XXXX : Mortgage Annual Escrow Analysis sent to us stating our escrow was negative by - {$1700.00}. 

XX/XX/XXXX : Went into 5/3 branch and spoke with Personal Banker II who called mortgage department and escrow department. Spoke with 2 different women in insurance center, XXXX and XXXX, on the phone. XXXX stated that on my account, she could see where on XX/XX/XXXX a cancellation was started for the force-placed lender insurance policy and that there was no active policy on my account for XXXX XXXX XXXX & XXXX XXXX XXXX. 
She also saw that on XX/XX/XXXX that a request for an escrow reanalysis was in process, and the escrow re-analysis was completed on XX/XX/XXXX. XXXX said a letter should be coming via mail soon stating that the force-placed lender insurance is cancelled and if the escrow payment for this policy, {$1700.00}, was not refunded before our mortgage payments increase to cover the negative escrow balance, that 5/3 escrow department will also refund the extra escrow payment received to cover the negative - {$1700.00} balance. 

XX/XX/XXXX : Called Insurance Department at XXXX and spoke with an agent named XXXX. Then asked to speak to the supervisor, and was transferred to a man named XXXX. He said that the letter of evidence of insurance from 5/3 was back-dated to the first day of non-compliance for our flood insurance policy with XXXX XXXX, XXXX XXXX  XXXX, which was XX/XX/XXXX to XX/XX/XXXX. I told him that before XX/XX/XXXX, we were NEVER made aware that our private flood insurance policy with XXXX XXXX, XXXX XXXX XXXX was non-compliant for basically the entire year. As soon as we received the non-compliance notice in XXXX, we immediately got a new NFIP policy on our home that was sent to 5/3 on XX/XX/XXXX and active XX/XX/XXXX. He said he would " send it to his higher ups to see if an exception can be made '' regarding the return of the payment for force-placed lender insurance, but there was no guarantee. He also couldn't tell me which department he was sending my information to, but that he would look into it but wouldn't know when I would receive communication about all of this again since it was getting sent off to his higher ups in a different department. I had told him what multiple 5/3 employees told me beforehand that the force-placed lender policy was cancelled and my money should be returned to escrow, and he apologized and told me " I am sorry they told you wrong. '' The call ended leaving me more frustrated, confused, and in disbelief that especially during a pandemic, 5/3 was gouging our escrow account for even more money for a policy they placed for our property we didn't even know existed and had failed to notify us of in the first place. 

I am very confused why there is such a breakdown in communication and notifications on 5/3 Bank 's part to us, the borrower, about our insurance policies, and why multiple agents are telling me to disregard future notifications from 5/3 and that the {$1700.00} would be refunded to our escrow account. 
That being said, If the original private insurance policy with XXXX XXXX, XXXX XXXX  XXXX, was non-compliant on XX/XX/XXXX, why were we only made aware of this 11 months later in XX/XX/XXXX instead of right away so we could correct it, like we did, ahead of time to avoid force-placed lender insurance? We also never received any notice that 5/3 was going to force-place insurance on our property until a bill came in the mail with evidence of insurance on XX/XX/XXXX and the payment was taken out of escrow on XX/XX/XXXX for XX/XX/XXXX to XX/XX/XXXX. 

I am going to go back to the same 5/3 branch today to read them this complaint and have a personal banker try to call again to see what is going on if they can receive more answers. I emailed my insurance agent, XXXX XXXX, who said that they received no notice on their end that our flood insurance policy was non-compliant last year for the XX/XX/XXXX to XX/XX/XXXX term. I am also waiting for XXXX to call me back to see if he has heard anything from his " higher ups. '' At this point, I am also going to write a formal notice of error to 5/3 Escrow and Insurance Departments and refinance my home with a new lender when this is settled. As a 10+ year customer of 5/3 bank, I am disappointed in the lack of communication to us - the borrower,, the breakdown of communication between departments, and the unethical practices that we were subjected to. The last I read it was unlawful to impose force-place lender insurance on a property without at least 2 formal, written notices to the borrow which we DID NOT receive before it was wrongfully effective for our property. We just want our money back and for this situation to be corrected : give us our money back in our escrow in the amount of {$1700.00} and cancel the force-placed lender insurance policy with XXXX XXXX XXXX XXXX  XXXX XXXX and send us confirmation that this has been done.