A warning for borrowers
The other morning I got an alarming call from my insurance agent. He said my homeowner’s policy was 10 days away from being canceled. Why? Because the mortgage company hadn’t paid the premium, something I thought was an automatic process that didn’t require any action, or thought, on my part. Needless to say, I had to get this straightened out right away.Thanks very much for sharing, Scott. Glad the problem seems to be on the mend.
As soon as my agent shared the news, a little light bulb went off. My mortgage had been bought a few months earlier by another mortgage company. Maybe, I figured, there had been an oversight in the handover. Indeed, that’s more or less what happened. I raced home, where I happened to have a cancellation letter waiting in the mail. Then I called the new mortgage company and to my surprise got a human being on the line in seconds. She told me there was no automatic provision for the premium to be paid. Apparently, my new mortgage company’s “welcome letter” told me this, but I had neglected to read that letter.
Fortunately this was an easy problem to fix. The woman at the mortgage company gave me a fax number where the agent could send the insurance bill, and my agent sent off the fax. The woman at the company assured me the premium would be paid well before the cancellation date. (I’ll be checking.) And not to worry, she said, my property tax payments would be paid automatically.
To me the obvious lesson is this: Double-check that the mortgage company pays the homeowner’s premium (and property taxes) from escrow, particularly if the mortgage trades hands, as commonly happens these days. And take a minute to read all welcome letters, no matter how boilerplate-y they seem.