Consumer complaint received 2022-03-12 00:00:00
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — 
Company: Shellpoint Partners, LLC
State: FL

Complaint narrative:
Newrez states that the law mandates the escrow of flood insurance. 

I don't understand that claim. If I pay the flood insurance and Newrez never gets an invoice, what gives them the right to my money hold it and use it to invest and make profit on MY money and keep it for themselves.

I researched the law that was cited in the letter. I found an exemption that I believe I qualify for and sent it to Newrez. I have not heard back from Newrez. Nothing has changed in my payment. I believe Newrez is ignoring the exception I found in the law in order to hold my funds. 

The BiggertWaters Flood Insurance Reform Act intention is to protect the lender 's investment by providing a vehicle to assure a property, used as collateral, is protected. 

When a borrower pays the FLOOD INSURANCE, Newrez does not receive an invoice, which would be like Newrez receiving an invoice for {$0.00}. An escrow for {$0.00} would be {$0.00}. However, Newrez appears to be abusing the intention of the law by picking and choosing excerpts of the act and OVER-ESTIMATING the next year 's flood insurance, thus manipulating the BiggertWaters Flood Insurance Reform Act in order to use the borrower 's money to invest and profit from it. Newrez can reap profits and keep it all to themselves. 

MY policy is a XXXX Direct policy that meets 339.5 2.iii.A. I am the exception. 
NEWrez should not be taking out escrow for my flood insurance. 

The following is " escrow requirement '' : 339.5 Escrow requirement. 
( a ) In general - ( 1 ) Applicability. Except as provided in paragraphs ( a ) ( 2 ) or ( c ) of this section, an FDIC-supervised institution, or a servicer acting on its behalf, shall require the escrow of all premiums and fees for any flood insurance required under 339.3 ( a ) for any designated loan secured by residential improved real estate or a mobile home that is made, increased, extended, or renewed on or after XX/XX/2016, payable with the same frequency as payments on the designated loan are required to be made for the duration of the loan. 

( 2 ) Exceptions. Paragraph ( a ) ( 1 ) of this section does not apply if : ( i ) The loan is an extension of credit primarily for business, commercial, or agricultural purposes ; ( ii ) The loan is in a subordinate position to a senior lien secured by the same residential improved real estate or mobile home for which the borrower has obtained flood insurance coverage that meets the requirements of 339.3 ( a ) ; ( iii ) Flood insurance coverage for the residential improved real estate or mobile home is provided by a policy that : ( A ) Meets the requirements of 339.3 ( a ) ; ( B ) Is provided by a condominium association, cooperative, homeowners association, or other applicable group ; and ( C ) The premium for which is paid by the condominium association, cooperative, homeowners association, or other applicable group as a common expense ; ( iv ) The loan is a home equity line of credit ;

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