Legal Question in Credit and Debt Law in Indiana
We have found ourselves in the most bizarre set of circumstances. Let me start by saying that we have never missed a payment on our home and they've all been on time. And we have paid all of our taxes too. But because of an insurance, we are being threatened with foreclosure.
Although in our previous home, we had been paying for insurance on a monthly basis, when we purchased this home, we had to pay for a year up front. The insurance agent assured us that at the end of that year, we would be paying monthly again.
Fast forward two years. Almost simultaneously we received notices from the insurance company stating that our policy had been cancelled for lack of payment a YEAR earlier and a notice from our mortgage holder (Chase) that they were charging us $3000 for a policy to cover the previous year!
It seemed so absurd. You can't buy insurance retroactively! If my home burned to the ground and afterward I went out to buy insurance, they'd laugh me right out of the office!
We contacted the bank and we contacted the insurance agent. The insurance agent stopped just short of admitting that it was a snafu on her part because she didn't input the information correctly to begin with. The bank pretty much told us "Too bad".
The insurance agent assured us that she'd take care of it and we heard nothing for a long time. Now, the bank is sending us letters threatening to foreclose on our home unless we pay that $3000. Apparently they have been siphoning off a portion of our payment to cover that retroactive insurance policy and are now showing us behind on our payments. And the agent? She's now saying there's simply nothing she can do.
We stand to lose our home and I can't imagine the damage that's been done to our credit report over this. The argument can be made that we should have paid more attention to the details on our insurance bills. But we've had bigger fish to fry and simply didn't.
Here's the thing. Despite financial hardships of our own, we have, as I said, made our payments and made them on time. With all the foreclosures these days, I would think the bank would be happy to have someone doing things the right way, could see the absurdity of selling a retroactive insurance policy and would wipe this out. But that doesn't seem to be the case. We can't afford an attorney ... do you have any suggestions for what action we should take and/or are there any public agencies that might be able to help us?
Any direction you could give me would be greatly appreciated.
1 Answer from Attorneys
Simply stated you are going to have to find the money for an attorney or to make the payment.
You may have a cause of action against the insurance agent. However, as you noted, you should have kept an eye on this. How could you not know that insurance was not being paid? Your mortgage payment did not go up? Did you not receive notices from your agent that payments were due? The bigger fish to fry argument is not going to cut it.
The bank has an absolute right to purchase the insurance if you did not. Your promissory note gives that that authority. You might want to read through that to see if earlier noticves should have been sent to you.
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