Of Lenders and Insurance Agents

Yesterday I received an email saying that we had a credit balance of more than $800 on our homeowners' insurance policy. I called my agent to see what was up.

She told me that they had just received a payment from our lender which was due this month, but they had also received a payment back in January. That payment was held because they could not post it until there was a balance due (which was this month). So, essentially, our premium was paid twice in May.

The back story is that we refinanced our home with the same lender on Christmas Eve of 2008. However, we did not deal with the lender directly, but used a mortgage broker (or at least that's what I would call them). Our lender had record of the insurance payment just made, but no record of the one made in January. Apparently the brokerage paid it out of our closing costs on the re-fi.

To complicate matters a little further, neither amount was correct. The amount the lender paid was correct for last year's premium, but not for this year. The amount the brokerage paid in January seems to have been pulled out of someone's...um...hat, because it doesn't correspond to ANY previous premium amount. It seems there had been a lack of communication between the lender and the insurance agent regarding the refinancing, our new loan number and the new insurance amount.

After an hour or so on the phone to both the mortgage lender and the insurance agent, I think we have everything straightened out. The lender now knows the correct premium due. The insurance agent now has the correct lender information and account number. We will get the overpayment refunded directly to us from our insurance company. Our escrow with the lender seems to be in good standing, but just to be on the safe side, I'm going to put $200 of that refund back into the escrow. The remaining money will go into savings. Everybody's happy now.

Our insurance agent told me that all the upheaval in the mortgage industry has caused a lot of information to fall between the cracks. She advises that anyone who has had any kind of recent changes in their mortgage should call their insurance agent to make sure all information is current and correct. A few minutes now could save a lot of time and trouble later.