What to do if your mortgage company buys homeowner's insurance for you, when you already have it.

J Thomas Black
Board Certified, Consumer Bankruptcy Law- Texas Board of Legal Specialization

A gentleman called me today quite irate about his mortgage company, and I don't blame him. He claims to have homeowner's insurance on his house, but the mortgage company bought some for him, and then set up an escrow account to make him start escrowing money to pay for the insurance that the mortgage company bought. Now they are threatening foreclosure because they are saying he is not paying the full monthly mortgage payments.

Unfortunately, this scenario is not uncommon. The caller said he was frustrated because he had called the mortgage company numerous times.

First of all, there is a federal law that governs mortgage servicing. It is the "Real Estate Settlement and Procedures Act" or RESPA. Under RESPA, if you have a dispute or complaint concerning your mortgage, you may make a "qualified written request" or QWR to the lender concerning the servicing of your loan account.

The request should not be included with the monthly mortgage payment. You must mail it to the correct address (the correspondence or QWR address). I recommend that you send it certified mail, return receipt requested.

The lender must acknowledge the complaint within 20 business days and must resolve the complaint within 60 business days by correcting the account or giving a statement of the reasons for its position.

If you do not get a satisfactory answer from the lender, you may wish to consult an attorney, as you may have a civil action or lawsuit against your mortgage company. Meanwhile, you should continue to make your mortgage payment during this time.