Consumer complaint received 2019-01-09 00:00:00
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — 
Company: Specialized Loan Servicing Holdings LLC
State: FL

Complaint narrative:
Specialized Loan Servicing ( SLS ) acquired my mortgage including servicing beginning on or about XX/XX/XXXX. The mortgage was previously originated and serviced by XXXX XXXX XXXX  XXXX XXXX  in XX/XX/XXXX. At origination and at the time of the acquisition/servicing transfer to SLS, the loan was only escrowed for property taxes. It was not for insurance as the condominium master policies were provided at origination and were sufficient for closing. It is extremely important to note that my loan was originated without a requirement or condition for me to have an HO-6 insurance policy. 
On XX/XX/XXXX SLS claims to have sent me a first notice of expiration of a condominium unit owners policy. I never received the first notice from SLS. On XX/XX/XXXX SLS sent me a second notice which I did receive. Shortly thereafter I called and verbally spoke to SLS loan servicing department to inform them that my loan was originated without an HO-6 policy and that it was not required at origination. SLS was only able to respond that the HO-6 policy was required by law in Florida. I informed them that it was required in Florida in XXXX but an amendment was made to the Florida laws in XXXX in which the requirement was removed. The SLS representative did not take the time to consider the correct information I relayed to her and just kept saying that HO-6 insurance was required in Florida. I then called a second time to see if I could speak to a rationale person at SLS and again communicated to SLS that it erroneously was requiring me to have an HO-6 insurance policy. Again I explained to the representative that Florida laws were amended in XXXX and that any explicit requirement that condominiums must have an HO-6 policy was removed. Since the SLS representative continued to communicate to me that Florida law requires me to have an HO-6 policy, I specifically asked the representative to have SLS Legal send me evidence that Florida had such a requirement. The representative stated that someone would research and call me back. On XX/XX/XXXX a SLS representative named XXXX XXXX ( spelling may be wrong ) left me a voicemail requiring me again to have an HO-6 policy and to send evidence of an HO-6 policy. She also stated that it was Required by the State of Florida which is not correct. I have this voicemail saved as evidence that SLS gave me incorrect and misleading information. Although I requested it, SLS never provided me in writing any legal citation that I was required in the state of Florida to maintain an HO-6 insurance policy. On XX/XX/XXXX SLS force placed insurance costing {$5100.00} covering XX/XX/XXXX XX/XX/XXXX. This amount of force placed insurance impacted my monthly loan payment. My loan payment increased {$1200.00} ( 77 % ) from {$1600.00} to {$2900.00} based on an escrow analysis completed by SLS which was immediately enforced. Even though I did not have any prior damage to my property or any claims, they placed insurance retroactively for the entire year at an egregious cost of {$5100.00} when the market cost of HO-6 policies is approximately $ 600- {$700.00}. In XX/XX/XXXX SLS then renewed the forced placed HO-6 policy at an even higher cost of {$5600.00}. This new policy is a whopping 10 % higher than the prior policy which was force placed just 2 months prior. I ended up getting my own HO-6 policy for the sole purpose of reducing my required escrow amount and monthly payment to escrow until this issue was resolved and NOT because of any Florida requirement because one does not exist. My cost of getting an HO-6 policy was {$590.00}, approximately 89 % less than what SLS charged my escrow account.

In the end, I believe the actions of SLS violate the Dodd-Frank Wall Street Reform and Consumer Protection Act which requires covered persons or service providers such as SLS to refrain from committing unfair, deceptive, or abusive acts or practices. SLS force placed an HO-6 insurance policy on my loan on the premise that it was required by Florida law as SLS representatives stated in a voicemail message which I saved and can provide. The citation of that law could not be provided by SLS when requested. Therefore it is contended that no such legal requirement exists for my loan. In addition, no such requirement was in place at the time of my loan origination and, therefore, no such requirement can arbitrarily be imposed on my loan by SLS at its leisure. As such, the act of SLS of incorrectly force placing an HO-6 insurance policy on my loan was an UNFAIR act in that 1 ) it caused me direct and substantial injury since my monthly payment immediately increase by {$1200.00} ( 77 % ) per month and I had to eventually get my own HO-6 policy which I was not required to obtain 2 ) it was not avoidable by me ; even though I attempted to resolve the matter with SLS prior to the force placement, SLS did not act appropriately and continued with the erroneous force placement ; furthermore, if I did not pay the increased escrow amount, then SLS would have reported negatively and incorrectly to the credit bureaus which would have created yet another regulatory violation ( of FCRA ) on their behalf 3 ) my financial injury was in no way outweigh by any benefit of having the HO-6 policy ; in fact, the first policy was retroactive 11 months from the date it was purchased ; since I had no events or claims during those 11 months then the benefit of the policy was solely for SLS, NOT the customer ; in addition, since the HO-6 policy is not a legal requirement, then I do not believe the benefits of the policy costing approximately 89 % more than the typical market price outweigh its costs.

The acts of SLS were also DECEPTIVE in that 1 ) I the consumer ( and potentially other consumers ) was mislead by SLS as an SLS personnel made an explicit Representation to me that the HO-6 policy was required by Florida law. I have subsequently consulted 2 separate law firms and both have informed me that Florida law was amended in XXXX and as a result there is no such explicit requirement that I have an HO-6 policy on my condominium ; furthermore, since I requested SLS to provide me evidence that a Florida requirement for the insurance existed and SLS did not provide evidence of such legal requirement, then SLS may have Omitted material information ; 2 ) since my loan was originated without the requirement of an HO-6 insurance policy and without the requirement to place funds in escrow for the purpose of purchasing an HO-6 policy, then my belief that an HO-6 policy was not required is reasonable 3 ) the misleading act by  SLS is material The acts of SLS were also ABUSIVE in that I that consumer placed reasonable reliance on SLS to act in my interest. However, SLS did not adequately perform its responsibilities in understanding Florida law and did not provide me with the evidence and citation of the Florida law SLS referred to in its voicemail probably because the requirement does not exist ; SLS was in a position to take advantage of me as I felt I did not have any other avenue to gain clarity on the matter and resolve it except for getting my own legal advice. 

Should this formal complaint not be resolved to a mutual satisfaction, I will have no choice but to proceed with formal legal action. I hope we can all come to an agreement.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation