Consumer complaint received 2018-05-30
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — 
Company: PARAMOUNT RESIDENTIAL MORTGAGE GROUP (FL)

In XX/XX/XXXX, my mortgage holder switched the loan servicing for my mortgage to a different division of the same company ( from the XXXX division to the XXXX division ). At that point the company asked me to submit proof of homeowner 's insurance, which I did promptly by submitting the policy held by my townhome 's HOA. They initially sent me a letter stating they did not receive proof of my insurance, so I called them and discovered someone couldn't open the email attachment I sent with the policy. I then sent the proof again in XX/XX/XXXX. I asked why no one initially wrote me back by email telling me the attached file would not open for them. They had no answer for this, but it was the start of my doubt about the reliability of their procedures/staff. After they confirmed receipt of my policy, I asked if they had all they needed from me, and I was told they did. 

After that date, I started receiving automated letters from a XXXX XXXX office of PRMG saying that they did not receive proof of insurance. The letters threatened to buy insurance for me. I called to clear up the issue, and again, I was told they had my proof of insurance and that I should disregard the letters. Still, the letters kept coming, and I kept calling. In XX/XX/XXXX, they sent a letter stating that they had received my proof of insurance and were cancelling a policy I was unaware had been purchased ( see attached ). Since the letter stated ( I have a copy of it still ), " We are pleased to have received confirmation of your insurance coverage and our records have been updated accordingly. The temporary insurance that was purchased on your behalf as of XX/XX/XXXX has been canceled. .... '' I assumed that finally PRMG had resolved their issues.

Again though, I started getting letters contradicting the letter from XX/XX/XXXX. In XX/XX/XXXX, I called them again, and finally, I spoke to someone who did not agree that they had received everything from me. They told me that I was missing an additional policy not included in my HOA 's master policy. This was called interior condo-insurance or H06 insurance. I was not aware PRMG required this. I had this insurance at the time of my refinance with them, which initially originated the loan because I used to carry this for my own sake. However, the company that insured me recently stopped covering my area. As soon as I was made aware of the requirement by PRMG, I purchased a policy through XXXX XXXX. Until that point, I believed my HOA 's policy was all PRMG needed. I submitted proof of this new policy to PRMG, and they sent me a letter confirming receipt. However, they also stated that they had decided to purchase a back-dated policy for the period from XX/XX/XXXX-XX/XX/XXXX. The policy was very limited in coverage, was for a year that had passed already, and was purchased at an exorbitant price ( {$1200.00} ). I looked into the practice called back-dated, forced placed insurance, and discovered that several states including my state of XXXX  have been looking into stopping the practice after several class-action lawsuits have been successful against companies deploying this unscrupulous tactic. I asked PRMG to remove the policy and to refund my escrow account, they refused to do so. It is unethical to allow financial institutions to back-date insurance policies and to sell those policies at exorbitant rates. Insurance for a year that has already passed without claims is not insurance at all. It's guaranteed profit, free from risk, and the mortgage companies are receiving a kickback on these policies. I tried to provide proof of insurance to PRMG in good faith, and I was told that I had done so by their staff ( over the phone since XX/XX/XXXX, and even in writing back in XX/XX/XXXX ). I tried to comply with all of PRMG 's requests in good faith. It was due to miscommunication on the part of their staff, that I didn't secure the additional policy earlier. As a result, that back-dated forced placed policy should be canceled, and my money should be refunded. Additionally, I question the morality of issuing a back-dated insurance policy above market prices. This should be illegal, and that is why companies employing such methods have been sued over the practice. Those suits have resulted in millions of dollars in damages being paid to consumers. It is time XXXX defends its citizens ( especially it's elder population ) from these fraudulent practices, and Congress needs to step in on the national level.