Action 9 investigates a mortgage nightmare that's returning as property values go up.
Some lenders delay removing mortgage insurance fees even when homeowners don't owe them.
Charlie Coleman made many improvements since buying his home in 2010. His property value has gone up, so he thought ending his private mortgage insurance, also known as PMI, would be easy. Private mortgage insurance covers the lender if the homeowner defaults on the loan.
“The contract clearly states that at the end of 60 months that (it) is supposed to be removed from the contract,” Coleman said.
The insurance costs $600 a year, but months after asking Nationstar Mortgage, Coleman said he’s still being charged.
“Customer service there is nonexistent,” Coleman said.
Nationstar did respond a couple of times, but Coleman said he could not believe what he heard. Coleman said instead of removing the fee, the lender wanted him to refinance the loan.
Coleman wanted an appraisal to prove his loan balance was less than 80 percent of current value, which is usually another reason to end PMI.
“I called back several times to schedule the appraisal and they would shift the conversation,” Coleman said.
Nationstar is rated F at the Better Business Bureau with more than 3,100 complaints, many of which involve difficulty contacting the lender.
“Trying to get confirmation on when your mortgage insurance will come off is a complaint I frequently hear. The lender will not tell me when that magic date comes up,” attorney Karen Wonsetler said.
She said she found Coleman’s loan disclosure and contract were in conflict. His PMI fee could last several more months, but Wonsetler said Nationstar owes Coleman a response.
“They have one agenda, which is to pad their pockets at the expense of the consumer,” Coleman said.
Nationstar did not respond to Action 9’s questions.
By law, a lender must tell you at closing when private mortgage insurance payments will end, but many times consumers must still force the issue.
Some lenders delay removing mortgage insurance fees even when homeowners don't owe them.
Charlie Coleman made many improvements since buying his home in 2010. His property value has gone up, so he thought ending his private mortgage insurance, also known as PMI, would be easy. Private mortgage insurance covers the lender if the homeowner defaults on the loan.
“The contract clearly states that at the end of 60 months that (it) is supposed to be removed from the contract,” Coleman said.
The insurance costs $600 a year, but months after asking Nationstar Mortgage, Coleman said he’s still being charged.
“Customer service there is nonexistent,” Coleman said.
Nationstar did respond a couple of times, but Coleman said he could not believe what he heard. Coleman said instead of removing the fee, the lender wanted him to refinance the loan.
Coleman wanted an appraisal to prove his loan balance was less than 80 percent of current value, which is usually another reason to end PMI.
“I called back several times to schedule the appraisal and they would shift the conversation,” Coleman said.
Nationstar is rated F at the Better Business Bureau with more than 3,100 complaints, many of which involve difficulty contacting the lender.
“Trying to get confirmation on when your mortgage insurance will come off is a complaint I frequently hear. The lender will not tell me when that magic date comes up,” attorney Karen Wonsetler said.
She said she found Coleman’s loan disclosure and contract were in conflict. His PMI fee could last several more months, but Wonsetler said Nationstar owes Coleman a response.
“They have one agenda, which is to pad their pockets at the expense of the consumer,” Coleman said.
Nationstar did not respond to Action 9’s questions.
By law, a lender must tell you at closing when private mortgage insurance payments will end, but many times consumers must still force the issue.
Cox Media Group
