Consumer complaint received 2020-03-31 00:00:00
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — 
Company: ALLY FINANCIAL INC.
State: TX

Complaint narrative:
My mortgage provider failed to pay an insurance account for which they were responsible. As a result of their failure to pay the account and their decision to snail mail me all notifications in relation to this account, my policy lapsed and could not be renewed for the full year. Thus, I did not have coverage and was charged by the mortgage provider for gap homeowners insurance at a monthly rate of approximately 5 times the market rate. My mortgage provider claimed erroneously that I was responsible for the insurance payment ( they are clearly the 1st mortgagee on the paperwork ) and claimed they were holding my escrow to pay my flood insurance, which I am responsible for and renewed in a timely fashion. 
The timeline of events is as follows : Early XX/XX/XXXX : I begin getting reminders from my flood insurance and homeowners policy providers that my policies are up for renewal and that I need to pay them. Assuming the bank is aware that they are responsible for my homeowners insurance, I pay the flood insurance. My bank, without notifying me, rejects my homeowners insurance providers request for payment, cancelling the policy while in possession of my escrow money. 
Late XX/XX/XXXX : I begin receiving requests for proof of insurance from my mortgage provider ( via snail mail ). Assuming that this is an issue with the flood policy, as they should be the primary contact and responsible party on my homeowners policy, I call the bank and my insurance broker and arrange for the appropriate documentation to be submitted. The bank acknowledges the receipt of these documents and tells me the matter is closed. 
Mid-Late XX/XX/XXXX : I receive notice that there are further issues with my insurance coverage from my bank. I am puzzled and assume that this was sent via snail mail prior to my call until I receive another notice later in the month. I call the bank assuming this is a mistake ; the bank informs me that they have canceled the policy and maintain that they are not responsible for the homeowners insurance but rather the flood insurance ( a payment I had made and documented with them already XXXX. I renew the insurance myself out of my own money. The insurance company informs me that they can not cover the original time period as the window to do so has lapsed, so they will only cover the policy on a go forward basis. I was not aware this would cause further issues at the time. I then request the bank return my escrow balance, which they do by the middle of XXXX. 
XX/XX/XXXX : The bank informs me that they have charged me for the gap insurance for the month where I was not covered due to their incompetence. The premium for the month is exorbitant -- {$1100.00} or approximately 5x the original monthly rate of {$230.00}. I contest this charge with them and request that someone from their executive team calls me. I receive no communication from them. 
XX/XX/XXXX : My insurance provider cancels my policy again for lack of payment as the renewal payment I made in XXXX was lower than it should have been due to an issue with the application my insurance broker submitted. My bank refuses to pay my insurance providers, so I am forced to again pay for the insurance and renew the policy. This time no gap coverage is needed. I change myself to the primary mortgagee on my homeowners insurance policy.

Company response to consumer: Closed with explanation