Consumer complaint received 2023-04-08 00:00:00
Product: Mortgage — VA mortgage
Issue: Trouble during payment process — 
Company: Shellpoint Partners, LLC
State: CA

Complaint narrative:
To whom it may concern, I have received VA-guaranteed home loan assistance for my townhome and I feel like I'm being targeted by a predatory mortgage loan business and can use your help. 

I financed with XXXX XXXX XXXX in XXXX and everything was simple, then they were bought by New Residential Investment Corporation ( Newrez ) in XXXX. 

Newrez obtained my loan in XX/XX/XXXX and hasn't been shy to push illegal requests and charge fees without cause. 

On XX/XX/XXXX XXXX requested I have additional home owner insurance for the interior of my townhome, called HO6 insurance. 

My HOA that I pay each month covers the exterior and roof of the property, which is called HO3 insurance. XXXX XXXX XXXX  was fine with just the HO3 coverage. 

Luckily, I had just signed up in XX/XX/XXXX for HO6 insurance, effective XXXX XXXX XXXX, so I thought any confusion with XXXX might be averted. I would have activated the insurance earlier if I had any idea it was mandatory by the new company : XXXX. 

On XX/XX/XXXX I received a letter from XXXX that said they had purchased 'lender-placed insurance ' without my knowledge or permission and I knew they were going to charge me for that. 

So on, XX/XX/XXXX, after receiving proof of my new HO6 insurance, starting on XXXX XXXX, Newrez upped the ante and demanded that I have HO6 coverage dating back to when they obtained the loan in XXXX of XXXX, well before I was notified of the new standard. 

If I can't provide such proof, then I'm fined {$720.00} for the three months of coverage that's in the past, when nothing happened to my house or belongings and there's no explanation other than " Customers have to have it '' even during a time when they didn't ask for it. 

To add to the financial burden is the cost of the HO6 insurance. The inflated cost is well over the {$100.00} a month I currently pay monthly with XXXX.

Additionally, and illegally, they require the interior insurance amount to cover almost the value of the townhome. They want the interior HO6 insurance to cover {$380000.00} on a {$450000.00} townhome. Most of the value is the land ; not flooring or walls. 

According to XXXX, I meet the value of my home currently, yet Newrez requires double that amount, which conflicts with California state law : CA Civil Code, Section 2955.5.

" No lender shall require a borrower, as a condition of receiving or maintaining a loan... exceeding the replacement value of the improvements on the property. '' After repeated calls, Newrez refuses to listen to my concerns and continues to press to charge me an inflated fee and force me to over-insure my townhome. I have offered to take pictures or videos of the interior of my home to avoid the charges but they are set on getting money that creates no value. I feel like their going into business to set up people and give them no alternative but to pay a fee. It pains me to think other hardworking people are also being trapped by Newrez 's poor customer service.

I really need help from this 'out-of-state " predatory business that strives to increase profits, regardless of the impacts it has on honest, homeowners.

The resolution that I am seeking is to have them dismiss the {$720.00} charge for HO6 insurance that's before they requested it plus honor the California insurance code and accept the insurance coverage that XXXX suggests. 


Thank you so much for your time and in advance for any feedback/ suggestions.

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation