Seeking Advice on Lender-Placed Insurance Dispute After Loan Payoff

Tampa, Florida
Legal & Legislation
2yFollow

Seeking Advice on Lender-Placed Insurance Dispute After Loan Payoff

Mergim Kacija
Member since 2024 · 2 posts · 0 votes

Hello BP,

I'm hoping someone here can provide insights on an issue I'm dealing with. I took out a 12-month hard money loan with HouseMax Funding, a reputable lender, for a fix-and-flip project. Before closing, I was required to purchase 12 months of insurance, which was paid from escrow at closing. When I sold the house 120 days later, I noticed a $14k charge for lender-placed insurance on the closing statement.

I reached out to the lender and provided proof of my coverage during the loan period. HouseMax agreed that I am owed the full $14k, but they informed me that the "investor" and loan servicer (FCI) are refusing to refund the amount.

I'm unsure who should be held accountable or what my legal rights are in this situation. If anyone familiar with lending law could offer some guidance, I’d greatly appreciate it.

Thank you,
Mergim

0Reply
45 views

5 Replies

Jump to latestLatest
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    2y

    @Mergim Kacija

    1. Who is the “lender” on your note and mortgage?

    2. In public records was it ever assigned or were you ever notified of a transfer

    Once you find the lender I would reach out to them directly

    I would also get an attorney involved in the state and potentially seek legal action and see if there are also trebled damages as well.

    Was the loan already paid off?

    7e investments53 Reviews
    WebsiteView Page
    0Reply
  • Mergim Kacija
    OP
    Member since 2024 · 2 posts · 0 votes
    2y
    Quote from @Chris Seveney:

    @Mergim Kacija

    1. Who is the “lender” on your note and mortgage?

    2. In public records was it ever assigned or were you ever notified of a transfer

    Once you find the lender I would reach out to them directly

    I would also get an attorney involved in the state and potentially seek legal action and see if there are also trebled damages as well.

    Was the loan already paid off?


     Hi Chris, 

    1. My settlement statement has "Housemax Funding LLC" as the lender on both closing statements, however, they told me that they sold the loan to a REIT (NY Trust).

    2. I was not notified of a transfer during the 120 days that I held the loan. 

    Yes, the loan is paid off and house was sold 30 days ago. The 14k lender placed insurance showed up on my HUD during the sale and HouseMax advised I just pay it and get reimbursed afterwards.

    0Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    2y
    Quote from @Mergim Kacija:
    Quote from @Chris Seveney:

    @Mergim Kacija

    1. Who is the “lender” on your note and mortgage?

    2. In public records was it ever assigned or were you ever notified of a transfer

    Once you find the lender I would reach out to them directly

    I would also get an attorney involved in the state and potentially seek legal action and see if there are also trebled damages as well.

    Was the loan already paid off?


     Hi Chris, 

    1. My settlement statement has "Housemax Funding LLC" as the lender on both closing statements, however, they told me that they sold the loan to a REIT (NY Trust).

    2. I was not notified of a transfer during the 120 days that I held the loan. 

    Yes, the loan is paid off and house was sold 30 days ago. The 14k lender placed insurance showed up on my HUD during the sale and HouseMax advised I just pay it and get reimbursed afterwards.

    Forget the HUD when it comes to ownership, when you signed your documents there is a mortgage and note in that package. The first line of item #1 of the note should be:

    Who is that. That is where the money went and who you have to chase. I would get an attorney involved for this as I am guessing this is your first or one of your first deals



    BORROWER’S PROMISE TO PAY

    In return for a loan in the amount of U.S. $ _________ (the “Principal”) that I have received from _____________________ (the “Lender”), 




    7e investments53 Reviews
    WebsiteView Page
    0Reply
  • Account Closed
    Investor · Member since 2023 · 118 posts · 61 votes
    2y

    Make it simple on yourself. Since you already paid, file a claim in small claims court naming whoever is on the payoff demand, FCI in this case apparently.

    Something similar happened to me a while back.  Escrow closed on a property I sold, I was charged for taxes I already paid, that fact was clear as could be.  I spoke with everybody at the escrow company .... talk, talk, talk ... nothing.  I filed in small claims court, nothing until the day before hearing, escrow called and paid me.

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free