Consumer complaint received 2025-03-14 00:00:00
Product: Mortgage — FHA mortgage
Issue: Trouble during payment process — Escrow, taxes, or insurance
Company: Mr. Cooper Group Inc.
State: CA

Complaint narrative:
This is the letter I sent to Mr. Cooper : To Whom It May Concern, I am writing to address a serious breach of your legal and fiduciary duties as the servicer of my mortgage. Despite my timely and full payments into the mortgage/escrow account managed by Mr. Cooper, you failed to disburse payments for my homeowners insurance for two years, resulting in a lapse of coverage. This egregious mismanagement violates both state and federal laws, and has directly caused financial loss due to substantial damage to my home. They are claiming my account is not escrowed which is a total error and my loan origination document clearly states my insurance is escrowed. 

On XX/XX/year>, my property suffered catastrophic water damage due to a pipe or appliance failure ( currently under investigation ). The resulting flood caused extensive destruction, including the total loss of my kitchen and damage to walls and flooring on two floors. Because Mr. Cooper failed in its obligations, I was left without insurance coverage, forcing me to bear these costs personallysomething that was entirely avoidable had you properly serviced my escrow account. Also, the lender placed insurance has been unresponsive and an adjuster has not contacted me even after receiving a claim number to understand coverage although my home is in immediate threat.

Federal and State Law Violations : As my mortgage servicer, Mr. Cooper had a legal and contractual obligation to : Ensure timely payment of escrowed funds to my homeowners insurance carrier.

Notify me immediately if there were any issues with escrow disbursements or a lapse in coverage.

Maintain accurate escrow records and provide transparency regarding disbursements.

By failing to do so, Mr. Cooper is in violation of the followin
g laws : Federal Law Violations : Real Estate Settlement Procedures Act ( RESPA ), 12 U.S.C. 2605 ( g ) You are federally required to make timely escrow disbursements for items like homeowners insurance to protect my property and your collateral.

RESPA, 12 U.S.C. 2605 ( k ) ( 1 ) ( C ) Mortgage servicers must take appropriate action to ensure that hazard insurance premiums are paid in a timely manner from the escrow account.

RESPA Regulation X, 12 C.F.R. 1024.17 ( k ) Requires prompt disbursement of escrow payments to avoid penalties or lapses in coverage.

Consumer Financial Protection Bureau ( CFPB ) Rules You are also subject to CFPB rules prohibiting unfair, deceptive, or abusive acts or practices ( UDAAP ). Failing to manage my escrow funds and leaving me uninsured constitutes an unfair and deceptive practice under federal law.

California State Law Violations : California Civil XXXX XXXX Requires servicers to pay insurance premiums in a timely manner when escrow funds are collected. 
California Unfair Competition Law ( UCL ), Business and Professions Code XXXX et seq. 
Engaging in unlawful, unfair, and fraudulent business practices by failing to pay escrow obligations and not notifying me of the lapse. 
I am demanding based on my legal rights : A full written explanation for your failure to remit timely payments from my escrow account to maintain insurance coverage. 
A complete escrow account history, including all disbursements and payments, to identify where your servicing errors occurred. 
Documentation of any force-placed insurance you XXXX have initiated, including terms, coverage periods, and scope. 
Compensation for the full cost of : A complete kitchen rebuild Repairs to walls and flooring on XXXX floors Any temporary housing expenses or relocation costs Loss of use and enjoyment of my home Bills incurred from increased energy, water, and other resource usage during this time of construction Any further damages, costs, and legal fees incurred as a result of your negligence. 
Repairs Will Commence Immediately : I must begin repairs immediately to prevent further damage, protect the structure, maintain my property value, and resume safe use of my home. Mr. Cooper will be held financially responsible for all costs arising from this event. 

Sincerely,

Company response to consumer: Closed with explanation