I signed a Deed of Trust with SunTrust in September 2006 where I made monthly mortgage payments that included insurance and taxes in an escrow account. In September 2007, SunTrust sold my loan (and escrow) to Chase Mortgage and Chase began servicing the loan. Just a few weeks prior to the loan transfer, SunTrust made a payment to my homeowner’s insurance company, Travelers, out of the escrow account as required by RESPA. Unknown to my family at the time, SunTrust did not notify Travelers of the transfer so Travelers continued to bill SunTrust in 2008. According to billing records that I obtained from Travelers, SunTrust was actually billed 4 times starting in August 2008. Since Chase was servicing the loan at this time, they claim to have notified me via letter on a couple of occasions in November and December of 2008 prior to enforcing lender force coverage insurance at about 6 times the cost of the Travelers insurance policy. The only problem with that is once I saw the alleged notifications from Chase, I realized that I haven’t actually seen these letters so I asked for proof of mailing (as is required in Tennessee). Despite numerous requests, I haven’t received anything.
I received word of this issue on July 21, 2009, when I received a default letter from Chase Bank requesting approximately $2,200. When I finally got to the bottom of what was causing the issues, believe me it wasn’t easy, I realized what had occurred so I contacted SunTrust to find out why Travelers wasn’t notified and why they didn’t respond (or forward) the bills when the received them. A representative told me over the phone that they transferred all of the information to Chase at the time of transfer including the insurance information. I found out several months later that the lender forced coverage that was provided was through American Security Insurance who is owned by Assurant who is owned by JPMorgan Chase (who owns Chase Home Finance). There was no open market competition and insurance rates aren’t regulated (just recorded) so in essence Chase took out the insurance policy with a company that they directly or indirectly own through a “reinsurance” scheme. There have been a couple of class action suits regarding this behavior (ie. Abels –v JPMorgan Chase).
As a way to “stop the bleeding” for the exorbitant insurance rate, I took out another policy with Travelers on August 4, 2009. I received a Confirmation of Cancellation from American Security Insurance on September 25, 2009 stating an effective cancellation date of August 4, 2009. I found out later that the policy was not paid by Chase Mortgage and lapsed so the American Security lender forced insurance policy continued despite the letter that I received. When I found this out, I took out another homeowner’s policy, this time with Liberty Mutual Insurance on April 19, 2010. Chase finally made a payment on May 3, 2010 but the collection calls that I still receive daily state that my payment STILL reflects the lender forced coverage rate.
The story actually gets worse as Chase attempted to foreclose on my home in February 2010 and as I found out that since Tennessee utilizes a Deed of Trust as the security instrument and foreclosures are not handled through the courts (non-judicial), it makes it very easy for them to file and the burden shifts to the mortgagor (or trustor) to protect the home from foreclosure. In the meantime, we have NEVER missed a payment though we have not paid the additional $300 per month for the lender forced coverage. Chase has returned our last 3 checks to us so I have continued to hold back the money.
I have tried to utilize every resource possible to fight this wrongful foreclosure attempt. I have filed complaints with HUD, Comptroller of the Currency, Federal Trade Commission. I have spoken with the Tennessee Dept of Financial Institutions, Tennessee Dept of Commerce and Insurance. I have written several letters to Congressman Jim Cooper and Senators Lamar Alexander and Bob Corker in addition to a letter to the White House.
Just yesterday, I called Chase to get a reinstatement amount (that I was previously promised but they did not submit) and they informed me that my home was 8 payments behind (how did they come up with that?) and it had a sale date of Monday, August 16, 2010 (this was on Wednesday, August 11, 2010). I immediately called my attorney as I didn’t have any notice of this event and the Chase Attorneys (Wilson & Associates) denied that there was a sale date and the Register of Deeds in Wilson County wasn’t showing this. I am told that it will require $5,000 - $7,000 to file a lawsuit but my family doesn’t have the time and money to fight this for very long. I am a state employee, a husband and the father of 4 children so as you can imagine we are pretty much “month to month”. We didn’t do anything wrong, in fact I have spent countless hours fighting this issue as I have accumulated over 75 documents and 200 e-mails and faxes related to our efforts to resolve.
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