Escrow Dilemma
I’ll do my best to explain my situation clearly.
I recently purchased a house, and my insurance company sends the declaration pages to my lender. After the lender sold my mortgage to another company, I informed the insurance company, and they sent the declaration pages to the new lender. Unfortunately, the original lender was still listed on those pages, which led to the new company using a lender-placed insurance policy instead. My insurance agent mentioned this, while the mortgage company insists they never received any documents. When I found out, I alerted the insurance company, and they assured me that they resolved the issue.
Fast forward a few months, and I received a call from my insurance company saying that I’m in collections because the escrow payment wasn’t made. I contacted my agent, and he told me they had sent me letters about this issue. I take responsibility for this mix-up since I travel often and tend to overlook the large volume of mail I receive.
I met with my agent, who showed me the paperwork confirming that the declaration pages were sent to the mortgage company, but they claimed not to have received them. Upon my research, I discovered that the pages were sent to an entirely different mortgage company. They have now halted the collections process.
My agent mentioned that if I could prove I had lender-placed insurance during the five months of unpaid dues, they would drop the issue. I provided the proof, but they backtracked. They argued that the lender-placed insurance had lower coverage than their policy, even though I had liability coverage. They still insist that I owe them money.
I feel like we both share some responsibility in this situation. The confusion arose from their multiple failures to coordinate with my mortgage provider, but I also could have addressed the issue sooner if I had paid more attention to their correspondence. I don’t believe it’s fair for me to have to pay when both parties made mistakes, especially since there were no claims made during this period.
Does anyone have advice on how to proceed from here?
It sounds like you’re in a frustrating situation, and it’s understandable that you’re feeling overwhelmed. Here are some steps you can take to work toward a resolution:
Gather Documentation: Keep all records of communication with both the insurance company and the mortgage company. This includes emails, letters, and notes from phone calls. Document everything, including dates and times. This will help you build your case.
Request a Formal Explanation: Contact the insurance company and request a formal explanation of why they believe you owe them money. Ask for detailed documentation regarding the declaration pages and the lender-placed insurance.
Review Your Policy: Double-check your insurance policy to understand your rights and obligations. Look for any clauses related to non-payment, errors in communication, or lender requirements.
Contact the Mortgage Company: Reach out to the new mortgage company and explain the situation. They may be able to clarify what documentation they received and help resolve the issue with the insurance company.
Negotiate: Since both parties have some fault, consider negotiating with the insurance company. Explain your perspective, and see if they can offer a compromise. For instance, they might waive part of the amount owed or offer a payment plan.
File a Complaint: If you feel that the insurance company is being unreasonable, you can file a complaint with your state’s Department of Insurance. They may be able to assist you or provide further guidance.
Consult with a Lawyer: If the situation does not resolve and you’re facing significant financial repercussions, consider consulting with a lawyer who specializes in insurance or consumer law. They can provide legal advice and may help negotiate with the insurance company on your behalf.
Stay Proactive: Ensure you monitor all future correspondence regarding your insurance. If you continue to travel, consider setting up email alerts or a mail forwarding service to ensure you don’t miss any important documents.
While it’s unfortunate that both sides made errors, focusing on clear communication and documentation will be key in resolving this issue. Good luck!