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re: Flood Insurance Fraud Story-You aren't going to believe this one.
Posted on 8/26/16 at 1:18 pm to Lsupimp
Posted on 8/26/16 at 1:18 pm to Lsupimp
quote:uh oh
I am fairly certain that the loan originator posts here. I am absolutely certain that said originator knows our good friend, the much-respected NovaB and it would make sense that he knows GFunk too.
2
Posted on 8/26/16 at 2:23 pm to castorinho
Posted on 8/27/16 at 10:51 pm to hungryone
Very well put and a logical statement. Waiting on a lawsuit or even an insurance settlement to make you feel "whole again" will never happen.
He needs to take action now and get his belongings together, insurance/fema/lawsuit money will take some time.
He needs to take action now and get his belongings together, insurance/fema/lawsuit money will take some time.
Posted on 8/27/16 at 10:52 pm to Omada
FTR-I'm unfamiliar with any originators who also write insurance. At least that I'm aware of.
Before people freak, GMFS is a huge mortgage company-that was founded out of the ashes of UC Lending BTW-that has ownership stakes in Title Companies, insurance companies and other tertiary and yet complimentary businesses that are in a sense ways for them to diversify and yet continue to increase the amount of money they make on the RE Finance process.
So it's not an unheard of thing. But typically in a closing there's a disclosure that the borrower/mortgagor signs stating they have been made aware of the business relationships/ownership status between the companies.
I'm still really really unsure whether or not this went down the way it's been relayed to the OP. Just being honest. No shot at OP. Just something that's incredibly difficult to have happen. Even if you're trying to do it.
Before people freak, GMFS is a huge mortgage company-that was founded out of the ashes of UC Lending BTW-that has ownership stakes in Title Companies, insurance companies and other tertiary and yet complimentary businesses that are in a sense ways for them to diversify and yet continue to increase the amount of money they make on the RE Finance process.
So it's not an unheard of thing. But typically in a closing there's a disclosure that the borrower/mortgagor signs stating they have been made aware of the business relationships/ownership status between the companies.
I'm still really really unsure whether or not this went down the way it's been relayed to the OP. Just being honest. No shot at OP. Just something that's incredibly difficult to have happen. Even if you're trying to do it.
Posted on 8/27/16 at 11:02 pm to GFunk
The good news on toms part is not only will he be going up against the originator/insurance agent the mortgage company will be going to bat too. The good thing about having a mortgage is that the bank is invested with you and wants to protect their assets as much as you do. Furthermore the banks usually have better lawyers and have experienced this before. I'm excited for Tom and I hope they cut the hands off of this fraudulent thief.
This post was edited on 8/27/16 at 11:04 pm
Posted on 8/27/16 at 11:10 pm to Mud_Till_May
I haven't read the whole thread but if he was in a flood zone and required to have the insurance, I am pretty certain the mortgage company would require some sort of proof of coverage to fund the financing. Does Tom have a copy of his Hud1 or CD (I don't remember how long ago you said he closed) showing where the flood insurance was paid during the closing or reflected as a POC?
As a side note, our flood insurance is in fact in our escrow.
As a side note, our flood insurance is in fact in our escrow.
Posted on 8/28/16 at 12:17 am to geauxlsu09
just reading this makes me want to throw up. I cant imagine seeing this first or even second hand.
Posted on 8/28/16 at 12:35 am to horsesandbulls
Felonious False Pretense.
Posted on 8/28/16 at 12:57 am to Chad504boy
If the agent agrees that he made a mistake then it will go through DOI process and as long as the agent isn't on bad terms (several complaints to DOI) then they'll probably get it resolved and no one will suffer.
If the agent denies the accusations and your friend can show proof of payment, then the agent is fricked and you sue his arse
If the agent denies the accusations and your friend can show proof of payment, then the agent is fricked and you sue his arse
Posted on 8/28/16 at 8:52 am to Lsupimp
quote:And if you think it's the first time he's done this, you're really naive. There are more mini-Madoffs than we'd like to believe.
From hearing Tom's story it seems likely that the mortgage originator stole his premium and never secured the policy.
Exhibit A (the "Double-Down Dare"): The loan originator then said "you have two choices-you can sue me or I can refund the 3,000 back to you".
This post was edited on 8/28/16 at 9:35 am
Posted on 8/28/16 at 1:21 pm to GFunk
quote:
I'm still really really unsure whether or not this went down the way it's been relayed to the OP. Just being honest. No shot at OP. Just something that's incredibly difficult to have happen. Even if you're trying to do it.
What is your problem with specifically ? Ask me and I can tell you what I have personally verified and what is conjecture.
The flood insurance was a line item the HUD. I've seen it.
Tom was told he had insurance. He paid for it (again-on the HUD).
The check for insurance was written to a company that is owned by the originator.
Flood insurance somehow was never placed in force.
You tell me what happened with those facts.
Especially knowing what Tom was told after this was all revealed.
Maybe there is an innocent answer.
You have forgotten more this week than I know about the mortgage industry.
So I humbly and graciously defer...
Posted on 8/28/16 at 3:00 pm to Lsupimp
Obviously I'm touching a nerve here which isn't my intent. I don't have a problem. The OP has the problem. The issue at hand is how a lender would fund a loan without demonstrative proof flood insurance was in effect at the date/time of the closing?
Does your friend have disclosures in his paperwork noting his flood insurance? It should be there along with the disclosures about the Hazard/Homeowners.
I guess after reading through this my questions are still the same as they were in my first post...or rather, my thoughts are the same.
That the lender or mortgagee would have to be complicit on multiple levels of fraud and malfeasance to look the other way when their legal requirement is to ensure an NFIP backed or private flood insurance policy is in place for any immovable property within a flood zone they're lending on, refinancing etc.
ETA: Lenders make staggering sums on mortgages both short, medium and long term. A $3,000 premium in this instance that opens them up to a massive legal liability just doesn't compute to me. Like I said...is it impossible? Hell no. Is it really, really unlikely? Hell yes.
Line item or not, the mortgagee doesn't just check that amount is correct and fill in the insurance companies name when drawing docs. They contact the company and verify the coverage is in place. Not doing that isn't just illegal...as a company they could lose their arse off in a situation like this where the subject property that is underpinning the investment itself is exposed to a huge potential loss.
Take a look through the regs yourself. There are a slew of disclosures for closing purposes and the lender has to be able to prove they were provided to the borrower on the mortgagor end and that they verified valid insurance was in place to protect the property from the mortgagee perspective.
LINK
Does your friend have disclosures in his paperwork noting his flood insurance? It should be there along with the disclosures about the Hazard/Homeowners.
I guess after reading through this my questions are still the same as they were in my first post...or rather, my thoughts are the same.
That the lender or mortgagee would have to be complicit on multiple levels of fraud and malfeasance to look the other way when their legal requirement is to ensure an NFIP backed or private flood insurance policy is in place for any immovable property within a flood zone they're lending on, refinancing etc.
ETA: Lenders make staggering sums on mortgages both short, medium and long term. A $3,000 premium in this instance that opens them up to a massive legal liability just doesn't compute to me. Like I said...is it impossible? Hell no. Is it really, really unlikely? Hell yes.
Line item or not, the mortgagee doesn't just check that amount is correct and fill in the insurance companies name when drawing docs. They contact the company and verify the coverage is in place. Not doing that isn't just illegal...as a company they could lose their arse off in a situation like this where the subject property that is underpinning the investment itself is exposed to a huge potential loss.
Take a look through the regs yourself. There are a slew of disclosures for closing purposes and the lender has to be able to prove they were provided to the borrower on the mortgagor end and that they verified valid insurance was in place to protect the property from the mortgagee perspective.
LINK
This post was edited on 8/28/16 at 3:07 pm
Posted on 8/28/16 at 3:05 pm to GFunk
Well the guy who owns Area Home Lending also owns Safe Source Insurance, although they operate independently and the LOs do not write insurance policies. If Toms LO also writes insurance that seems to be a huge conflict of interest.
Posted on 8/28/16 at 3:08 pm to Lsupimp
And if this is a local company I dont see the issue in naming the company so as others will know to avoid.
This post was edited on 8/28/16 at 3:20 pm
Posted on 8/28/16 at 3:08 pm to Lsupimp
Well the title company handles all $ at closing. They would have been ybe one to send the money to the various entities after closing.
Posted on 8/28/16 at 3:11 pm to npt817
quote:
Well the guy who owns Area Home Lending also owns Safe Source Insurance, although they operate independently and the LOs do not write insurance policies. If Toms LO also writes insurance that seems to be a huge conflict of interest.
quote:
npt817
I don't disagree but again I know examples of ownership stakes between companies offering different services within the same RE transaction.
As far as the same individual being the agent who writes the policy being the loan officer who originated the loan, I have not heard of that before. I am unfamiliar with whether it's letter of the law legal but I know I would be realllllllllly curious about it.
This post was edited on 8/28/16 at 3:13 pm
Posted on 8/28/16 at 3:13 pm to GFunk
No you aren't touching a nerve and I know you are just expressing that's it's not personal but you find this scenario implausible. Nothing you have said has been out of bounds. Being skeptical just tells me you are thinking rationally.
As to your many questions the answer is yes. He paid for a flood policy. That is documented on the HUD and with the required disclosures. In a way that satisfied both Tom and the mortgage company. However there is no flood insurance.
So now that you know that, what would you say happened?
As to your many questions the answer is yes. He paid for a flood policy. That is documented on the HUD and with the required disclosures. In a way that satisfied both Tom and the mortgage company. However there is no flood insurance.
So now that you know that, what would you say happened?
Posted on 8/28/16 at 3:28 pm to Lsupimp
It's frustrating for me because I'd be on the phone with the Underwriter asking EXACTLY how they verified insurance was in place at the time of closing. UW, post closing...there are multiple entities that seem to be points where this issue should be headed off at the pass.
Based on the info available here and previous experience, this would be incredibly difficult to pull off.
Based on the info available here and previous experience, this would be incredibly difficult to pull off.
Posted on 8/29/16 at 5:53 am to Lsupimp
Happens more than you think.
Same thing happened to my mom after Katrina. She had been paying insurance for years, and Thursday out, Chase mortgage never made the payments to insurance.
She obviously won in court, but it took years to get the money for her to finally build back.
Lesson learned: don't escrow taxes or insurance. I pay everything myself.
Same thing happened to my mom after Katrina. She had been paying insurance for years, and Thursday out, Chase mortgage never made the payments to insurance.
She obviously won in court, but it took years to get the money for her to finally build back.
Lesson learned: don't escrow taxes or insurance. I pay everything myself.
Posted on 8/29/16 at 9:07 am to GFunk
OP has never said what 'flood zone' Tom was in. It's very possible he was in Flood zone X and therefore flood insurance was not 'required' by the bank. There's no such thing as 'not being in a flood zone' you are just in a very low risk flood zone.
Furthermore, all the letters I've seen are extremely generic about mortgages and insurance. It wouldn't be that difficult to make a fraudulent letter stating insurance is there to fax over to a bank or what not. I could see a circumstance where the bank does not contact the insurance company directly but simply needs proof of insurance, and that proof is fraudulent.
Furthermore, all the letters I've seen are extremely generic about mortgages and insurance. It wouldn't be that difficult to make a fraudulent letter stating insurance is there to fax over to a bank or what not. I could see a circumstance where the bank does not contact the insurance company directly but simply needs proof of insurance, and that proof is fraudulent.
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