Insurance

Junior Fire Marshal hat from The HartfordOne of my biggest fears while my house was insured by the FAIR Plan was that they wouldn’t step up to the plate if I ever needed them.

Sure, the terrible policy they offered me (which I had to accept) barely covered anything to begin with but I just knew, deep down, that if I were to ever file a claim, they’d fight me every step of the way.

Thankfully, the need never materialized and now I’m with a much more reputable insurer.

But does that even matter?

Living in the outskirts of Hartford, Connecticut, the insurance capital of the world, the subject of insurance is in the news pretty often.

The media’s target this week is the insurer for Peanut Corp. of America (yeah, that company in Georgia responsible for the salmonella outbreak); The Hartford.

Though they’re one of the biggest insurers in the United States, a lot of people around the country are unfamiliar with The Hartford. That is, until you jog their memory a little.

Remember those awesome red plastic fire helmets that we all wore as pre-schoolers?

Yeah, those were all courtesy of The Hartford.

Seems their best marketing tool targets folks that are a little too young to use their services…

Anyway, given that there have been a number of deaths attributed to this tainted peanut supply, the lawsuits are sure to roll in.

This is where The Hartford comes in:

The peanut processor at the center of the nation’s deadly salmonella outbreak could be in an even stickier mess because its insurer — The Hartford — has rushed to court to limit what it might have to pay on lawsuits.

Hartford Casualty Insurance Co., part of The Hartford Financial Services Group, is asking a federal court to determine what its responsibility is on three years of policies it issued to Peanut Corp. of America.

The peanut processor makes peanut butter and peanut paste, which is used in baked goods and other foods.

The salmonella bacteria outbreak has sickened about 575 people nationwide, and at least eight have died. Connecticut’s Department of Public Health said nine cases of illness here may be associated with Peanut Corp. products.

The Hartford could be on the hook for up to $31 million in claims under the liability insurance policies at issue if it gets only unfavorable court rulings. It might cost the insurer millions more in legal costs, depending on how the policies were written.

Rather than wait to be sued by its customer, Peanut Corp., The Hartford asked U.S. District Court for western Virginia this week for a declaratory judgment on the policy dispute.

Peanut Corp. could face hundreds of millions of dollars in claims of various kinds, said Bill Marler, a Seattle trial lawyer specializing in food-borne illness lawsuits. Only three suits had been filed by Thursday afternoon on behalf of salmonella victims — two of them by Marler — but more are expected. The peanut company will also face massive claims from businesses for the cost of food recalls and lost profits, he said.

With the company facing all that and a federal criminal investigation, “it does seem a bit like The Hartford is kicking their insured under the bus at a time when they probably need a little support,” Marler said.

Now I can’t claim to know all of the details of their policy, and maybe the Hartford has a good reason for doing this, but the purpose of an insurance policy is to cover your arse if anything goes awry and, in this instance, the insurance company is pro-actively covering their own and trying to dodge their responsibility.

That’s wrong. On a number of levels, in my opinion…

In the unlikely event that something goes horribly wrong, the insurance company is supposed to have your back.

That’s the whole purpose — that’s exactly what insurance is for!?!

Seriously, if the insurance companies are still willing to sell the policies and the customers are still paying their premiums on time, should anything go wrong that’s covered in the policy, it’s the insurer’s responsibility.

What do these companies think people pay the premiums for?

If my house burns down tomorrow or if I’m in another car accident, will my insurance carriers pull this same type of move?

At this point, with news like this, I’m not exactly confident in saying that I’m “actually” covered for anything… even though I pay my premiums every time a bill comes in.

Seems now, maybe, I’m just sending them money for nothing…

Can’t anyone hold up their end of a contract these days?

Lowered my Mortgage PaymentNo, it’s not what you think…

Each October, on the anniversary of my mortgage, Countrywide runs an escrow analysis to ensure that they’ve put enough of my monthly payments aside to pay for things like city property taxes and the premium on my homeowners insurance.

This past October was no different, in that they did an escrow analysis. Totally expected.

Unfortunately, the results weren’t in my favor like they have been in the past — not sure why I didn’t mention it back in October…

Anyway, the short of it is that my monthly mortgage payment increased $78 — due entirely to the assessment done on my house in 2007 which resulted in an increase in my tax bill. Lucky break for the city, you know, doing a city-wide assessments when the market was at it’s all time high…

Anyway, not that big of a deal, I mean, I know it doesn’t sound like much, but it’s just a little bit of an annoyance knowing that another $78/month (or $936/year) isn’t hitting the principle. Whatever — it’s not the end of the world.

It’s like I’m paying the cable bill twice or something.

The last time my payment went *way* up, the following October I received a check from Countrywide. It was an escrow overage check. Somewhere along the line, numbers were incorrect and they were collecting too much from me for an entire year.

While the check was a pleasant surprise, I was a little bothered by the fact that they had continued to over-collect for, well, 11 months when my property taxes hadn’t increased enough to justify the bill hike and my insurance premium had remained steady.

Though they paid me back, with interest, I still felt a like I’d been ripped off.

I just chalked it up as something where, once they do their escrow analysis, that’s your payment, set in stone, for the next calendar year. I dealt with it.

So this year, when I caught wind that my payment was going up, but knowing that I was going to be switching my homeowners insurance (and lowering the premium paid from escrow), I was a little ticked off.

Terrible planning on my part. I couldn’t believe I’d overlooked this…

My mortgage payment was supposed to go down this year, not up!

I paid the November mortgage bill. And the December bill.

But then when Countrywide paid my homeowners insurance premium when I’d asked them not so, I saw an opportunity to do something about making sure that my payments wouldn’t go up again next year — or ever, barring any tax hikes.

I wanted to pay my insurance premium myself — take over the responsibility from Countrywide and, in turn, lower my monthly mortgage bill.

I went back to their online customer service page, where I’ve had so much success in the past. Not.

Here’s the message I sent:

I sent a message yesterday asking Countrywide NOT to send out the premium payment for my new homeowners insurance, but today I noticed that my transaction history has been updated and the payment has already been sent (dated Tuesday).

That’s fine — I’ll call them and have them accept Countrywide’s payment instead of mine.

In the future, next year, I’d prefer to pay the premium myself instead of having it built into my escrow account through Countrywide. How would I go about changing that so that this double payment scenario doesn’t happen again?

Thanks!

And here was their (prompt!) response:

Thank you for your recent Internet inquiry addressed to the Customer Service Department.

Our records reflect that we did not receive an e-mail from you in November 2008, the last e-mail received from you was on September 22, 2008. This is to confirm that your insurance information has been updated with an annual premium of $633.00, effective from November 11, 2008 to November 11, 2009. A payment has been disbursed from your escrow account to your insurance company for $633.00 on November 18, 2008.

As per your e-mail we have reviewed your account, your loan meets all the criteria for the deletion of insurance from the escrow account. We have hence deleted insurance from your escrow account as you asked. We have analyzed your escrow account on November 20, 2008,your monthly payment effective January 01, 2009 will be $1,226.7. An Escrow Review Statement has been generated and will be mailed to you, please allow approximately 7-14 days for receipt via U.S. mail.

We have provided a breakdown of your monthly installment, which will be effective with your January 2009 payment:

Description
Principal and Interest Payment : $817.27
City Taxes ($1,912.09 semi-annually divided by 12) : $318.68
P.M.I contribution monthly : $85.15
Reserve 16.60% : $5.27
Total Monthly Payment : $1,226.37

The Reserve item is an amount equal to 16.60% of the total amount of your escrow payment for the year that is collected each month. The Reserve amount is collected to ensure that the account has sufficient funds in the event that your tax and/or insurance bills increase. When we analyze your escrow account we will adjust the reserve amount based on the actual bills paid.

Thank you for communicating with us electronically, we appreciate the opportunity to be of assistance.

Hmmmmmm… I love that they mentioned September 22. Too funny.

The PMI line still irks me, but what can you do?

And really, I’d love to know what “criteria” my loan met for the deletion of insurance from the escrow account. I never could get an answer on what criteria I had to meet to drop PMI

Whatever.

In the end, though, I got what I wanted (a lower payment — lowest since 2004!) and earlier than I’d expected, so that puts a smile on my face.

Happy Thanksgiving!

4 1201

Over-the-counter Primatene Mist is the official inhaler of Pants in a CanFirst, the good news… Countrywide has updated my homeowners insurance carrier, correctly, and paid the premium.

To semi-regular readers, that’s old news

Now, the bad news…

I received a letter in the mail over the weekend from an insurance inspection company. (insert threateningly scary fanfare here)

My wife tells me not to worry about it but I’m having a lot of trouble putting it to the back of my mind.

I’m really susceptible to anxiety attacks — basically I stop breathing.

Not entirely, but I essentially bring on an asthma attack (like a stereotypical four-eyed nerd) and, on occasion, I’ll even break out an inhaler.

Yeah, it’s extra dorky and not something I’m proud of.

Most of my anxiety stems from things that I have no control over.

Scratch that.

It comes from things that I have little control over — thankfully not things like a huge decline in the stock market, rather stuff like the possibility of, well, losing my job or having my homeowners policy cancelled (again) which is why this letter is such bad news.

On the bright side, in comparison to my previous carrier, the FAIR Plan, the letter clearly indicates that it will not be an intrusive inspection.

In fact, it even states that I don’t even have to be present…

How about that?

That’s a HUGE improvement over past inspections where they’ve come in and essentially banged on every one of my walls to see if they could damage them or something…

One year, the inspector they sent out had to be pushing 400 lbs and he stomped up and down my basement steps not once, but twice. I was a little worried and, frankly, upset because it seemed to be a little excessive.

No, my house wasn’t built for 400-pound men — and being that I’m not even half that, I never expected to be.

If anything, he should be the one who can’t find insurance…

Okay, I’m getting off-topic…

Really, he was physically trying to break my house.

Every Geological Engineering Major has one!Further, while inspecting the exterior of the house, he pointed out some crumbling mortar in the brick foundation and then struck the brickwork with his geologist hammer, knocking the face of the brick off.

In shock, unsure of what to do, I said nothing, but seriously, he just struck my house with a pointy hammer.

What the hell is up with that?

Anyway, this one shouldn’t be anything like that but the way this one works, well, I’ve no idea when it will happen or how it turns out. If it happens to be raining the day they come out, they probably won’t even get out of the car…

I just have to sit and wait, then pray, that I don’t get a follow-up letter from the inspection company or the insurance company delivering any bad news.

Based on past experience, if I make it to January without anything, it will be smooth sailing from here on out and I’ll be able to take a deep breath…

And really, I’m trying to tell myself that I’ve got nothing to worry about.

New roof, new siding, new foundation… but who knows, maybe they’ll freak out about a crack in my driveway or a sinkhole in the yard…

Really, what if?

It’s those unlikely “ifs” that are driving me crazy…

Where’s that inhaler?

2 959

Pierre CullifordYesterday in the mail I received a big packet from the new homeowners insurance company. It looked like an honest to goodness policy — so things look really good on that front.

But also tucked inside was a bill. Hmmmm…

Perhaps there was a misunderstanding on the phone when I called about securing a new insurance policy… I was willing to pay the premium right up front — over the phone the day I called even, but when he asked who was paying my current premium, I said that Countrywide was paying it through my escrow account.

With that, I assumed that that’s the way things would continue.

Fine by me, it’s never a good time to be writing $633 checks.

But looking at this new policy, in big bold letters, right at the top it says, “Direct Bill – Insured.”

Maybe it’s just me, but that implies that they’re coming to me for direct payment.

So I logged on to Countrywide’s website to see if they’d updated my insurance information on their end — to my amazement, they had! Hooray for Countrywide!

But it also showed that they hadn’t paid the premium. Good, I thought — I’ll just pay the premium myself.

In the past, Countrywide had paid the FAIR Plan (my old insurance carrier) LATE two out of the past three years. State-run plans for dilapidated crack houses with no running water are not cool when it comes to things like that.

One year, as it came down to the wire with my policy expiring, I paid them in person. Then Countrywide paid them again — a few days late.

Being that this was a new company and I didn’t want to start the whole thing off as a big cluster-boink, or worse, a late payment, I logged on to the new carrier’s website and scheduled a direct payment for this Friday.

I mean, the bill clearly indicated that I was being billed directly — not my mortgage company.

I felt pretty good. For about an hour.

Then I started to worry about Countrywide… Are they going to pay it a second time? Hey, at least it won’t be late this year, I tried telling myself, just paid twice…

But what if they really screw up and send payment to the FAIR plan again? Will that result in an escrow shortage where Countrywide will raise my mortgage payment for the next 12 months because they screwed up and paid a bill that never had to be paid? That happened back in 2003 or 2004…

Oh crap…

I frantically logged on to Countrywide’s website and submitted a message detailing that I’d just switched insurance carriers, and that their site correctly lists the new carrier (shocking!), but that I’d already paid the premium. I basically asked, “Can you remove the insurance premium from your responsibility? I’ve already paid the premium — I don’t need it to be paid from my escrow account.”

Then I went to bed.

I get up this morning and check my transaction history on Countrywide and poof!

They paid the premium.

Dated Tuesday. That was two days ago.

But it didn’t show up on my transaction history yesterday. Wtf?

Ugh…

So I just sent them another message asking them to ignore last night’s message because they’d already paid it — but next year, I’d prefer to pay it myself. We’ll see what they say.

Then I went to the new insurer’s site to cancel the payment scheduled for tomorrow.

What a pain!

Now, I know, I should be pretty happy that I’m now holding on to the $633 in my checking account.

Yeah, that’s a welcome “drawback”, but the anxiety of relying on a company (Countrywide) that I don’t trust is *so* not worth it.

(They’ve paid my insurance bill late twice and city tax bill late, well, always. I’m not even talking about all of the PMI nonsense. Would you trust them with your important bills?)

Really, I’d much prefer to be responsible for, and pay, my own bills.

Hopefully this doesn’t happen again next year.

Big sigh…

4 1567

Crack HouseSeems I’ve secured a new homeowners policy — and it’s not of the plan for dilapidated crack houses with no running water.

Yippee!

But, as of yet, I don’t really have anything solid that makes me feel any different about my entire situation. One thing is for sure, though, the yearly inspections and harassing letters might finally be in my past.

Here’s how it all went down.

Sunday night, I surfed onto a couple of local independent insurance agency websites. The big companies, the kind you’ve heard of, won’t even talk to me because of where the policy is now.

I filled out the “quote” form on all of the sites, but only hit submit on the one that asked the most questions, you know, thinking they’d give me the most accurate quote since they had the most information. That would make sense, right?

Monday morning, not even 5 minutes past nine o’clock, my phone rang. It was the owner of the agency. After first exchanging some meaningless pleasantries, he started to go over what I’d submitted the night before.

“Current carrier — you selected ‘unlisted’ from the drop-down… Who is your carrier?” he asked.

Oh crap.

I lowered voice and uttered, “The Connecticut FAIR Plan.”

Here at PIAC, it’s also affectionately known as the plan for dilapidated crack houses with no running water. Seriously, that’s *exactly* what FAIR plans are for.

As a result, the conversation immediately took a turn for the worse as he stumbled out an “Oh…”

“Yeah, I’ve been trying to get off of it for years now. Their inspector has twice now even told me that I shouldn’t be on it anymore, but I can’t seem to find anyone willing to take me so I was hoping you might be able to help.”

He said that coming from the FAIR Plan would limit my options considerably and then started ringing off companies that wouldn’t touch me with a ten foot pole…

Then he started listing companies that don’t insure anything built before 1950 (which disqualifies like 80% of the homes in New England).

The city records claim that my house was built in 1900, but it’s a safe bet that it was build anytime between 1875 and 1900, more likely being the earlier date rather than the later. Horsehair in the plaster and plumbing obviously added after the house was up are pretty good indicators that it’s from waaaaaayyyy back.

For insurance purposes though, I always say 1900. When I want to brag, I say 1875. Yeah, that’s right, my house is older than your house.

It was at this point that I was starting to think that I was just wasting my time with this guy…

And then he asked me when my policy was set to expire.

“December 18th.”

“Hmmm, that doesn’t give us enough time for Metropolitan to do their inspection…”

He went on to say that, “Met is one of the few that still insures older homes,” and that they’ve nearly taken over that market and found that it’s really not high risk, but because I’m coming from a FAIR Plan, they’d need to a comprehensive inspection and that likely couldn’t happen before December 18…

Is he telling me that I took too long to fill in the form? Is he dangling a carrot in front of me? Can this guy help me? I couldn’t tell…

Then he said that there was a smaller company up in Massachusetts that they’d had luck with in the past with older homes. “They’ve been around since 1826, and they’re local to New England, so they’re familiar with the older homes and the risks involved…”

He asked me how I ended up on the FAIR Plan and how long ago and I gave him my full story. To summarize, basically, Allstate didn’t like my roof or siding — both of which have been replaced… recently. And that I’m still on the FAIR Plan because the moment I mention that I’m on it, insurance companies run for cover.

He said he’d give this Massachusetts company a try.

Later that afternoon, he emailed me a quote — $633 per year.

Wow. I’m set to pay $902 next month — $633 is a very welcome number. I emailed him back letting him know that I’d be willing to pay a premium 3 times that number just to get off the dilapidated crack house with no running water plan…

Now I know that that was probably a very stupid thing to say to an independent insurance agent since they’re just a middle man and I just gave him a huge opening to take an even bigger cut, but I wanted him to be fully aware that there was incentive on his end as well to get me off of the FAIR plan.

Seriously, I know as well as the next guy that flashing a little cash every now and then can open doors… and that was my plan…

In my email, I also asked him what additional info he’d need to get the wheels rolling.

Tuesday morning, we were back on the phone together. Today’s loaded question was whether or not I had good credit. I confidently said, “Yes.” He got my social security number and said he’d call back shortly…

At this point, I’m thinking things are going pretty well. I’m not really partial to the guy, but he seems nice enough.

About 45 minutes goes by and my phone rings.

“Things look good, your credit score is 830 and that should offset the fact that you’re coming from the FAIR Plan.”

“Yeah, I’ve known for years that I don’t really fit in to the FAIR Plan’s demographic…”

“Nope, you certainly don’t…”

Then he started to “sell” some auto insurance, asking what kind of cars we have… I told him that I wasn’t really interested in that right now, but maybe, down the line, if I could get everything under one company I’d think about it.

Of course, this line of questioning unearthed the BMW

From there, not surprisingly, he started talking up investment strategies, interest rates, life insurance, the current market conditions and, well, I guess you could call it “white collar” stuff.

Total change of tune.

He wasn’t so much making a sales pitch, but shooting the breeze at this point because, aside from my ghetto insurance, we suddenly had so much apparently in common…

Good thing I didn’t meet him in person — you know, being a scruffy looking, baseball hat wearing, converse all-star wearing kid… Would’ve ruined my image.

So, maybe a good credit score is worth something too? Or is it a BMW? Sad that that could be it too, really…

Anyway, he faxed me something to sign, I faxed it back, and apparently it went into effect yesterday.

Right now, though, Countrywide is still listing the FAIR Plan as my insurer, but I’ll be keeping an eye on it.

Hopefully this new company won’t cancel me the way Allstate did. Man, I really hope that doesn’t ever happen again…

But for now, or at least the next few weeks, I won’t need to sweat the inspection or threatening letters from the dilapidated crack house with no running water plan…

5 3206

Bob EnglehartThis weekend I took the first step in trying to obtain more conventional homeowners insurance.

What does that mean?

Well, right now, my insurance is bottom of the barrel insurance. When you have no place to go, and no one will take you, what I have right now is what they give you.

It doesn’t cover much (or anything), but it keeps the mortgage company at bay.

In the past, my insurance has prevented me from getting a home equity loan to help make the improvements needed to the house. (Though, looking back, I should almost be thankful for that).

Here’s how it went down — craptastic insurance company demanded that I make improvements to my home, I went to mortgage company for a home equity loan to pay for the requested improvements, everything is going great, and then the day of closing, the insurance company stops it dead in its tracks: not enough insurance to cover the loan.

Nice, huh? Talk about a Catch-22…

The worst part about it, other than the fact that my policy doesn’t cover anything, is that they send you threatening letters every few months and require home inspections each year. I won’t even mention the premium.

Basically, you’re treated as if you own a dilapidated crack house with no running water. Really.

I’ve been with this insurance for 5 years now and, frankly, I’m tried of it.

So why haven’t I switched already?

That’s the $64,000 question…

Not that many people shop around for homeowners insurance on a regular basis, but like with an auto insurance form, one of the first questions they ask is whether or no you’ve ever been cancelled or denied coverage from another carrier.

The minute you say “Yes”, you’re disqualified and hurried out of their office as if, well, as if you reside in a dilapidated crack house with no running water.

Back in October of 2002, Allstate dropped my coverage after just 29 days and gave me 40 days to find a new carrier.

With a strike like that against you, I soon found out, it was an impossible task.

My coverage lapsed.

With nowhere else to go, one very rude insurance agent gave me a route to take — the FAIR plan.

As I said, it sucks.

Now, before you start pointing out that my entry room is a little rough around the edges and that it kinda looks like a dilapidated crack house with no running water, let me list out why, exactly, Allstate cancelled my policy.

  • The roof of the dwelling is damaged and lifting/buckled.
  • The soffits/fascia/eaves are damaged and needs paint.
  • The renovations are not completed.
  • Your chimney is crumbling, separating, in need of tuckpointing.
  • The foundation of your dwelling or garage is crumbling.
  • The siding or frame exterior of your dwelling is damaged, has peeling paint.
  • One or more trees on your property poses a risk to your property because it is overhanging.
  • The windows of your dwelling or garage needs paint.

The lack of correct singular/plural grammar is theirs, not mine. The windows “needs” paint. Nice…

Anyway, as you see, those are all exterior issues. Every single one of them.

And what have I spent in excess of $40k renovating?

Yes, the exterior.

The roof is new as of December 2006.

The soffits, fascia, and eaves are all new as of August 2007.

The renovations are complete — at least the exterior ones are.

The chimney was torn down when we had the roof done in 2006.

The foundation was tuckpointed by the company we had tear down the chimney — brickwork is brickwork, right?

The siding is now vinyl — no peeling paint there.

The largest tree branch threat was cut down by the utility company because it posed a larger threat to their power lines than it did to my house.

And I’m not sure how the windows ever could have used paint — they’re all vinyl and have been that way since I bought the house.

So over the weekend, I contacted a local insurance agency — one that blew me off five years ago. I didn’t want to contact them specifically but, logistically, it made the most sense.

Hopefully they’ll call me back today asking for more info and further down the line, I’ll receive some good news.

My current policy expires December 18.

I’d rather not take it down to the wire…

2 1391

Mrs. ButterworthBut I didn’t call Geico.

Maybe I should have?

15 Minutes are so hard to find these days…

I also doubt that Mrs. Butterworth would have answered the phone there anyway and that would’ve left me somewhat disappointed…

Anyway, it all started last week when I received my renewal notice from Allstate.

Yes, the same Allstate that screwed me over royally with my homeowners insurance.

To their defence, they’re also the same Allstate that didn’t raise my premiums after I essentially totaled my BMW.

It’s a love/hate relationship.

Anyway, I recognize the moderately thick square envelope every time it arrives and it’s never good news — basically nothing more than a HUGE bill.

My premium this time was $1102.20 for the next six months.

That’s actually up around $31 since this time last year.

Sure, that covers my two cars but, even still, I’ve always felt that $2200 per year was a little steep. Perhaps not after the accident, but prior to that, definitely.

So flipping through the entire policy, and thinking about raising my deductible or just plain lowering some of my coverage to save a few bucks I noticed that it listed me as a “32 year old single male.”

A few problems with that… First, I’m only 31. Second, I’m married. That last part is factual. I am male.

Now, in addition, I’d received one of those canned cold-call emails in the middle of the night from my Allstate insurance agent. You know the kind. After they’ve made their pitch for something they always close with the standard, “If you have any questions about your policy, please don’t hesitate to ask!”

Okay…

I filled out the online form and said, “I got married back in 2006 but my policy still lists me as single. Will that get me any sort of discount? Please?”

I didn’t bother to mention the age issue as I’ll be 32 by the time the policy takes effect.

My agent’s secretary responded yesterday morning via email asking me to call the office to “confirm” the marriage.

After spending 4 minutes and 20 seconds on the phone during my lunch hour, I’m happy to report that my new 6-month premium is $885.40.

Over the span of a year, that’s over $400 less! That’s HUGE!

But now I’m kicking myself for being so friendly… I should have demanded the discount retroactively for the past 2 years…

Nah, a $400 savings is good enough for me…

10 3263

Countrywide Home LoansI knew it.

I knew it!

I knew that canceling PMI wasn’t going to be easy. I just knew it.

And I’m pissed.

Here’s the letter I received from Countrywide’s Mortgage Insurance Department yesterday:

IMPORTANT MESSAGE ABOUT YOUR LOAN

Thank you for your recent inquiry about deleting the mortgage insurance on your Countrywide home loan. Your loan must meet current mortgage insurance cancellation requirements for this to occur. Please allow us to explain what this involves.

———————————-

WHAT THIS MEANS

The current value of your property must be equal to or greater than the original value of your property at the time the loan closed for the PMI to be deleted. The original value of your property means the lesser of the sales price or the appraised value at the closing of a purchase loan, and the appraised value at the closing of a refinance loan. A Certificate of Value (COV) is required to determine if the current value of your property is sufficient to meet this requirement. Your noteholder requires Countrywide Home Loans to select your COV provider. You will be responsible for the cost of the COV. Before you send a check or call to provide credit card information for you COV, we would suggest that you try to verify that the value of your property meet the above mentioned criteria.

———————————-

WHAT YOU NEED TO DO

If you choose to continue with the COV ordering process, simply complete the form at the bottom of this letter and return it with a check made payable to Landsafe Appraisal Services for $130.00. You must reference your loan number and write “COV Fee” on the check. Please do not include the COV fee along with your regular monthly payment. It must be sent separately.

Landsafe w ill [sic] contract a local Broker or Realtor to perform the COV, which will include an interior inspection and photographs. The Broker or Realtor should identify himself or herself and indicate that he or she was contracted by Landsafe. If he or she fails to do so, please ask. Our department will then review the COV and if it is determined that it adequately supports at least the original value of the property, your request will be approved. The insurance will be cancelled and your payment adjusted accordingly.

———————————-

IMPORTANT INFORMATION

Because of your timely payment record, we are able to consider your request; however, please keep in mind that any late payment may prevent cancellation.

If you do not take action within 60 days, please contact us at (800) 669-6607 to confirm your continued eligibility.

We look forward to receiving you COV soon so that we can take care of this matter for you.

Requirements are subject to change.

This letter supersedes any previous information that may have been provided to you.

So, basically, they want me to pay them $130 even though I’ve met the criteria required to cancel PMI. I get it.

“This letter supersedes any previous information that may have been provided to you.”

Yep, it must.

I understand that the housing market is down and that mortgage companies like Countrywide are struggling but it was pretty clear (even on Countrywide’s website) that PMI cancellation could be requested at the 20% mark based entirely on the original value of the home. I’m past that mark.

While $130 really isn’t that much — my wife says it’s a great deal — the idea of paying them more to tell me that my house is worth more than it was 6 years ago doesn’t sit well with me.

Neither does taking time off of work to have a realtor come over and tour my house with a camera. The Fair Plan insurance inspections I’ve been subjected to are more than enough… Yeah, maybe I have privacy issues, but it’s really not cool to be forced to let strangers (essentially un-invited) poke their heads into your closets. And then demand money.

Heading over to the Federal Trade Commission’s website, on the subject of Private Mortgage Insurance they state:

For home mortgages signed on or after July 29, 1999, your PMI must – with certain exceptions – be terminated automatically when you reach 22 percent equity in your home based on the original property value, if your mortgage payments are current. Your PMI also can be canceled, when you request – with certain exceptions – when you reach 20 percent equity in your home based on the original property value, if your mortgage payments are current.

One exception is if your loan is “high-risk.” Another is if you have not been current on your payments within the year prior to the time for termination or cancellation. A third is if you have other liens on your property. For these loans, your PMI may continue. Ask your lender or mortgage servicer (a company that collects your payments) for more information about these requirements.

None of those exceptions apply to my loan. Not one.

My mortgage was signed after July 29, 1999. It’s not high risk, it’s current, and there are no liens on my property. No re-fi’s, no HELOC’s… Nothing…

Perhaps I should file a complaint with the FTC? That would probably be an even bigger hassle. You’d think that what the FTC says would “supersede” anything Countrywide says about the matter… You’d think…

But now I’m wondering if Countrywide will drop PMI without question at the 22% mark — where it’s supposed to drop automatically. While I’d prefer not to send the additional funds towards the mortgage right now, that mark is just around $2500 away. Do-able.

But if, at the 22% mark, they still come back with this exact same form letter, well, I guess I’m not sure what I’ll do then, but filing a complaint with the FTC will definitely look more attractive.

Can You Dig It?

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