Wells Fargo Mortgage Anyone else being forced to carry more flood insurance than originally agreed on? Internet

FEMA from time to time changes flood zones.  Who knows why.

Get a survey done that includes flood elevation.  There are standards that FEMA goes by.

http://msc.fema.gov/webapp/wcs/stores/servlet/FemaWelcomeView?storeId=10001&catalogId=10001&langId=-1

Talk to a surveyor in your area and for about $400 you can get a report that states you are not in a flood zone and then have the flood insurance waived.

I am assuming that you are not actually in a flood zone.

 

 

I am in a flood zone.  I have no problem with carrying the amount of insurance that was agreed upon at closing- 75k, the value of the mortgage.  They are attempting to force me to carry 250k, after they bought the mortgage from the original lender.  They want me to pay 300/month flood insurance on a 700/month mortgage.  They are doing this to others, and apparently Wells Fargo policy trumps the FHA.  Who would buy a house with a 700 mortgage, then need 300/ flood insurance.  If it was presented that way at the time, I wouldn't have bought the house.  And if you didn't like the mortgage terms, why did they buy it?

Wells Fargo tried this on my sisters acct I cosigned. The insurance they sell has commissions and payback perks that Wells Fargo benifits from. Check the federal trade commision under search Placed or Forced Insurance. Often if you have enough equity you dont have to insure at all. Regular home owners insurance is covered for sure as Ive been through that one myself. Flood insurance I dont know specifically since I didnt live in a flood zone at all.

The issue of agreement to insure in original contract may modify some rights but not all of them. FHA and VA insured loans also have condictions. NO CONTRACT can force you to buy insurance from a specific source do to recent FTC regulations. So if your contract says you do, its a voided provision now. Check the FTC website for info.

Get the best offer to insure your house you can get, and send it to them refusing their insurance in writing. Dispute any charges made against your loan amount. If my experience is any measure of yours they will resist, even removing it and then reimposing it months later. It took me 18 moths and 3 times removing the placed insurance before it finally stopped reposting. Whether an insurance company will insure for anything less than appraised value is another issue, some even require 150%. Technically they dont have to. However compare various insurance as all appraise differently.

I was able to beat WF placed insurance by nearly 65%. Your conclusion that the insurance they are pushing is 300% over priced is about typical. If you read the paperwork they sent with notice it even states they get commisions on the sale, identifies them as partners even. While there are limits on commisions the b**ch is in the details where as the partnership is a profit sharing agreement that sidesteps the limitations on commisions. The majority of cost is profit in the end. This is truly a ripoff by any definition since even the FTC ventures to call it one.

Dont just give in and accept what they are doing. They already know they cant actually force you to accept this ripoff but continue trying since so many people let them get away with it.

Most Mortgage Companies want you to carry the full FEMA Flood limits of $250,000 (building limits) since the Mortgage Company technically owns the home until it is paid off. 

A FEMA Flood policy of $250,000 building and $100,000 in contents coverage should cost approx.  $384.00 annually if your home is in a flood zone B C or X (preferred zone).  Your most expensive flood zones are A and V zones.

  DO Not let Wells Fargo continue with the forced place policy as they can charge you these high rates.  Contact your homeowner's insurance agent immediately and have them write a Flood policy for you.  If you need an agent check Floodsmart.gov. 

 You will be surprised at the amount of floods that happen in a B, C or X zones and your homeowner's policy does exclude this coverage.

If I needed to carry 250k, why wasn't this in the mortgage?  This all took place in 08, so if they wanted 250k, I could have said I just can't afford it.  They said I needed 75k, that's what they got. Wells Fargo then bought the mortgage from the originator, Sovereign.. Don't come back later and say we changed our policy.  If they didn't like the terms, why'd they buy the mortgage?

I'm going through the same thing with Wells Fargo (second servicer on my mortgage) on a house in Ohio I purchased last year.  My mortgage payment went up $125 a month in the new force-placed gap premium plus escrow shortages I now have to pay for prior months.  I wouldn't have bought this house if I knew this up front.  The house I bought was owned by a widow who qualified for a homestead exemption which cut the property taxes in half.  That will soon change and the house will have higher taxes due which will increase my monthly payment even higher (I was already anticipating that,  so its nothing to complain about).  I bought the house for 66,000, and with this flood policy of Wells Fargo, I will soon have a mortgage payment over 700 a month!  I done as much research as I can on this and it seems that there is no limit indicated by FEMA, FDIC or the OCC as to how much a lender can require.  FEMA only has a minimum requirement (the lesser of the principal amount, or replacement costs). 

My options now...  Refi, Survey or Sell.  Refi's cost money, Surveys and a Letter of Map Revision (FEMA form) cost money, and selling a house I just moved into a year ago could cost me money if the little bit of time owned reflects on the actual purchase offers. Affirmative action is required on my behalf since I can't afford this hoopla.

The banks, insurance companies and FEMA all have their hand in this as FEMA has a huge debt (from past disasters) to pay for in order to stay active.  Wells Fargo reps and FEMA are on business retreats negotiating these practices.  What aggrevates me worse is when I see certain forum comments from people such as: "Don't buy a house in a flood plain if you don't want to pay for insurance".  They don't realize that its a change in terms that upsets people, not the fact that insurance is necessary.  What else upsets people is the fact that dumb people get posting priviledges.