mortgage company forgot to pay homeowners insurance

[liquidcheese]

Hello!  First time caller, long time listener.  Been with same mortgage company for the past 6 years and they required me to set up an escrow account with them due to it being an FHA loan.  I checked my mail this morning to a lapse in coverage from my insurance company stating I have been without homeowners insurance since 4/20 and if they receive payment by May 9th their home office will consider reinstating my coverage.  I understand there can be misunderstandings, but I am still beyond pissed at this point.  Escrow was a requirement at time of mortgage because they wanted control over paying the insurance and taxes and they were the ones that messed up.  With it being Sunday I can not call the bank holding my mortgage until tomorrow. I am also about 50 minutes away from the bank holding my mortgage.  I am wondering if I should go in person instead of calling?  Has this happened to anyone before and how would you recommend handling this?  Should I pay the insurance myself to make sure it gets paid to get reinstated?

[forummm]

Pay it yourself and get reimbursed. Yell at the mortgage firm.

[Another Reader]

First, in most states you have a grace period during which you are covered, as long as you make the payment.  That's why you have until May 9th.  In your shoes, I would be on the phone to the mortgage company first thing tomorrow.  There should be a specific phone number for escrow or taxes and insurance.  Politely insist that the person on the phone track down what happened (or did not) and give you a full explanation.  Get a specific response as to what they will do and when.

Mortgage companies almost always have a fax number for this department, because they often request documents from borrowers.  Get that number from the CSR and write a brief follow up letter and fax it over with a copy of the tax notice.  Then send the letter to them by certified mail.

Call your insurance agent tomorrow morning and explain what happened.  Check with the agent after a couple of days to see if the insurance has been paid.  Pay the agent Thursday if the problem is not resolved.

Loan servicers are variable in quality.  Bad ones screw up and then deny they did.  If you have a bank servicing the loan, you will probably get a quick response.  Servicers of mostly lower grade paper are not banks and noted for making mistakes.  Document everything.

[ittakestwo]

wow, which mortgage company was it if you don't mind me asking?

[fishnfool]

Yep, it happened to me. The check was in the mail is what they told me after getting a bit stressed. Hopefully that is the case here. A slight delay in processing will trigger your homeowners insurance to send out the letter.

After talking to my mortgage company I called the insurance company and after a little checking they already had the funds in process.

Hopefully that will be what you'll find out when you call them. Sure can pissed you off in the meantime though.

Good luck!

[golfreak12]

It happened to me, surprisingly with Penfed.
The first mortgage I have with them, I didn't have an escrow.
The 2nd one they decided to do an escrow.(I didn't argue against it).
2 yrs in a row, they forgot and I paid it myself so after the 2nd time I told them to get rid of my escrow and I'll paid it myself.
But as someone else said. I would have paid it myself and have the bank reimburse.

[Metric Mouse]

Yeah, I'd go see them in person. I would want to see the look on the person's face as they tried to explain to me how they were late sending a check for MY house....

[former player]

While it is satisfying to think of going and yelling at someone in person, taking 3 hours out of the day and driving 50 mins each way isn't a terribly practical (or mustachian) way forward.

Certainly get on to the insurers and the mortgage company by phone and letter/email/fax as soon as possible and document the hell out of everything.  Pay up yourself before the deadline for making payment if the bank is being at all sketchy about putting things right.  Make sure you have the right pieces of paper to demonstrate the payment has been made and the insurance is in place.  In the meantime make sure the house is secure from theft and safe from fire, which are the most likely big potential losses.  You would probably have a claim against the bank if the insurers refused to pay, but better safe than litigating it.

[rtrnow]

While it is satisfying to think of going and yelling at someone in person, taking 3 hours out of the day and driving 50 mins each way isn't a terribly practical (or mustachian) way forward.

And it's almost certain the person you would yell at had nothing to do with not paying the insurance. I spent enough time in tech support being yelled out to generally keep a level head when dealing with customer service. There's also the whole more flies with honey thing.

[Metric Mouse]

While it is satisfying to think of going and yelling at someone in person, taking 3 hours out of the day and driving 50 mins each way isn't a terribly practical (or mustachian) way forward.

And it's almost certain the person you would yell at had nothing to do with not paying the insurance. I spent enough time in tech support being yelled out to generally keep a level head when dealing with customer service. There's also the whole more flies with honey thing.

Whose job is it to drop the check in the mail? That is the person you yell at. I'm not suggesting walk in and go off on the first teller or floor sweeper you see, but someone has to be responsible. Just because Everybody thought Somebody would do it, when Anybody could do it but it got left until Nobody did it, doesn't mean that there isn't a responsible party. Normally I play the "Golly gee, it was just too bad you didn't do your job, but I can see how it's just so gosh-darn tough to do what you're paid to and now that it's all wrapped up I suppose things are swell." kinda guy. But this is a very simple issue with catastrophic consequences for not being handled properly.  Low Probability/Extremely High Risk events that can be mitigated by dropping a piece of paper in the mail? Absolutely take out my latent aggression on those incidents. Wouldn't even feel bad about it.

[rtrnow]

While it is satisfying to think of going and yelling at someone in person, taking 3 hours out of the day and driving 50 mins each way isn't a terribly practical (or mustachian) way forward.

And it's almost certain the person you would yell at had nothing to do with not paying the insurance. I spent enough time in tech support being yelled out to generally keep a level head when dealing with customer service. There's also the whole more flies with honey thing.

Whose job is it to drop the check in the mail? That is the person you yell at. I'm not suggesting walk in and go off on the first teller or floor sweeper you see, but someone has to be responsible. Just because Everybody thought Somebody would do it, when Anybody could do it but it got left until Nobody did it, doesn't mean that there isn't a responsible party. Normally I play the "Golly gee, it was just too bad you didn't do your job, but I can see how it's just so gosh-darn tough to do what you're paid to and now that it's all wrapped up I suppose things are swell." kinda guy. But this is a very simple issue with catastrophic consequences for not being handled properly.  Low Probability/Extremely High Risk events that can be mitigated by dropping a piece of paper in the mail? Absolutely take out my latent aggression on those incidents. Wouldn't even feel bad about it.

Unless this is a tiny one branch operation, you chances of being put to face to face with that person is 0. There is almost certainly nothing to be gained except a day of frustration from driving to the bank and getting worked up.

[charis]

This happened to me with Bank of America.   We resolved it with a three-way phone conversation with me, a BOA person, and my insurance company.   BOA claimed that it never received the bill from my agent, so it was a matter of updating all of the contact info and making sure that everyone was on the same page. 

I was upset, of course, but that was fairly useless since what mattered was getting is straightened out.  Also, it did actually lapse, but since BOA required home insurance for my mortgage, they somehow obtained insurance for us during the gap.

[honeybbq]

This has happened to me before and why I will never ever EVER allow a mortgage company to escrow my money EVER again.

(obviously you probably don't have that choice on an FHA but they WILL FUCK IT UP).

I'll pay my own bills, thanks!

[SomedayStache]

This happened to me.  It was a fairly easy fix.  I made a phone call to the mortgage company, they got things sorted out.  I made a phone call to my insurance agent who was very understanding (and understood that it wasn't my delinquency - just the mortgage company.)  Within a few weeks things had been paid and my insurance agent wasn't going to drop my coverage because they were in the loop.

Then the same damn thing happened a year later.  But by year 3 it seemed the mortgage company had figured things out.

[patchyfacialhair]

This happened to me with Bank of America.   We resolved it with a three-way phone conversation with me, a BOA person, and my insurance company.   BOA claimed that it never received the bill from my agent, so it was a matter of updating all of the contact info and making sure that everyone was on the same page. 

I was upset, of course, but that was fairly useless since what mattered was getting is straightened out.  Also, it did actually lapse, but since BOA required home insurance for my mortgage, they somehow obtained insurance for us during the gap.

Jezebel stated the best way to handle this: three-way call like it's 1994.

[liquidcheese]

The bank that holds my FHA mortgage is a small 3 branch bank.  I talked to the lady who directly handles the payment of homeowners insurance and property taxes and she said they never received the bill from the insurance company.  She did apologize because she said she should of caught it anyways.  She did tell me that she sent in payment by mail Friday after my insurance company contacted her directly on Friday.  I told her I didn't understand why she couldn't call me on Friday after submitting the payment.  That seems like what customer service from a small town bank should be like.  It could of been an honest mistake, but its the final straw that is finally getting me off my arse to look at refinancing to a conventional mortgage.  I have a 5% mortgage with 53,000 left on the principle and 24 yrs left.  I've heard from others that I won't be able to refinance to a much lower rate than that with such a small principle and its probably not worth the time.  Well see.

[Frankies Girl]

Happened to me with Chase. It was a two way fault spread; the county tax assessor's office screwed up and submitted zeroed bills to Chase - literally said I owed zero dollars on property/school and MUD taxes, which was obviously a huge mistake, and then Chase just let it ride instead of someone saying "Hey, don't you think this might be an error?" with someone.

I caught it myself before it went delinquent because I check in January each year and saw no payments and got all the bills pulled from the county tax office and faxed over to Chase and then pestered every day until they paid it (took about 3 days).

No one still knows exactly what happened, but I'm glad I'm OCD about checking all my bills, even the ones that are supposed to be automatically paid.

[Metric Mouse]

While it is satisfying to think of going and yelling at someone in person, taking 3 hours out of the day and driving 50 mins each way isn't a terribly practical (or mustachian) way forward.

And it's almost certain the person you would yell at had nothing to do with not paying the insurance. I spent enough time in tech support being yelled out to generally keep a level head when dealing with customer service. There's also the whole more flies with honey thing.

Whose job is it to drop the check in the mail? That is the person you yell at. I'm not suggesting walk in and go off on the first teller or floor sweeper you see, but someone has to be responsible. Just because Everybody thought Somebody would do it, when Anybody could do it but it got left until Nobody did it, doesn't mean that there isn't a responsible party. Normally I play the "Golly gee, it was just too bad you didn't do your job, but I can see how it's just so gosh-darn tough to do what you're paid to and now that it's all wrapped up I suppose things are swell." kinda guy. But this is a very simple issue with catastrophic consequences for not being handled properly.  Low Probability/Extremely High Risk events that can be mitigated by dropping a piece of paper in the mail? Absolutely take out my latent aggression on those incidents. Wouldn't even feel bad about it.

Unless this is a tiny one branch operation, you chances of being put to face to face with that person is 0. There is almost certainly nothing to be gained except a day of frustration from driving to the bank and getting worked up.

The bank that holds my FHA mortgage is a small 3 branch bank.  I talked to the lady who directly handles the payment of homeowners insurance and property taxes and she said they never received the bill from the insurance company.  She did apologize because she said she should of caught it anyways.  She did tell me that she sent in payment by mail Friday after my insurance company contacted her directly on Friday.  I told her I didn't understand why she couldn't call me on Friday after submitting the payment.  That seems like what customer service from a small town bank should be like.  It could of been an honest mistake, but its the final straw that is finally getting me off my arse to look at refinancing to a conventional mortgage.  I have a 5% mortgage with 53,000 left on the principle and 24 yrs left.  I've heard from others that I won't be able to refinance to a much lower rate than that with such a small principle and its probably not worth the time.  Well see.

Foot, meet mouth?

[rtrnow]

While it is satisfying to think of going and yelling at someone in person, taking 3 hours out of the day and driving 50 mins each way isn't a terribly practical (or mustachian) way forward.

And it's almost certain the person you would yell at had nothing to do with not paying the insurance. I spent enough time in tech support being yelled out to generally keep a level head when dealing with customer service. There's also the whole more flies with honey thing.

Whose job is it to drop the check in the mail? That is the person you yell at. I'm not suggesting walk in and go off on the first teller or floor sweeper you see, but someone has to be responsible. Just because Everybody thought Somebody would do it, when Anybody could do it but it got left until Nobody did it, doesn't mean that there isn't a responsible party. Normally I play the "Golly gee, it was just too bad you didn't do your job, but I can see how it's just so gosh-darn tough to do what you're paid to and now that it's all wrapped up I suppose things are swell." kinda guy. But this is a very simple issue with catastrophic consequences for not being handled properly.  Low Probability/Extremely High Risk events that can be mitigated by dropping a piece of paper in the mail? Absolutely take out my latent aggression on those incidents. Wouldn't even feel bad about it.

Unless this is a tiny one branch operation, you chances of being put to face to face with that person is 0. There is almost certainly nothing to be gained except a day of frustration from driving to the bank and getting worked up.

The bank that holds my FHA mortgage is a small 3 branch bank.  I talked to the lady who directly handles the payment of homeowners insurance and property taxes and she said they never received the bill from the insurance company.  She did apologize because she said she should of caught it anyways.  She did tell me that she sent in payment by mail Friday after my insurance company contacted her directly on Friday.  I told her I didn't understand why she couldn't call me on Friday after submitting the payment.  That seems like what customer service from a small town bank should be like.  It could of been an honest mistake, but its the final straw that is finally getting me off my arse to look at refinancing to a conventional mortgage.  I have a 5% mortgage with 53,000 left on the principle and 24 yrs left.  I've heard from others that I won't be able to refinance to a much lower rate than that with such a small principle and its probably not worth the time.  Well see.

Foot, meet mouth?

Um .. that's basically what I said. So it's a tiny 3 branch instead of 1 branch. There's still no advantage to driving across town and getting pissed off and yelling at someone.

[Metric Mouse]

Foot, meet mouth?

Um .. that's basically what I said. So it's a tiny 3 branch instead of 1 branch. There's still no advantage to driving across town and getting pissed off and yelling at someone.

In my experience, I am often happier with the resolution of issues when taken care of face-to-face. YMMV. 

Getting pissed off rarely helps, but sometimes a good yelling does wonders for conflict resolution.

[katstache92]

I've had something similar to this happen, except it's the mortgage company that sends the nasty note.  It usually is something along the lines of, "your insurance ends on X date.  We have not received a renewal.  You must provide us with the renewal or we'll buy coverage for you."  Meanwhile it's too early for the renewal to be sent out and they run the escrow account anyway so they should really be reaching out to the insurance company rather than me.

Anyway, OP, I'm glad you got it worked out.  Hopefully it won't happen again next year!