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Call Kurtis: Foreclosed Over Flood Insurance?

SACRAMENTO (CBS13) ― A Sacramento family says they're facing foreclosure not because of their mortgage rate but because of flood insurance. And when they realized its insurance that's not even required, they called me.

The lender for the Crowl family claimed they need federal flood insurance. But the government says they don't, meanwhile their home is headed for auction!

"They said 'well, then we're gonna foreclose on your house'," said Adrianna Crowl.

Adrianna says she was mystified when she discovered her mortgage company isn't crediting her payments because they don't include the cost of flood insurance. The company claims her home sits in a flood zone -- and they're almost right!

"We're partially within one, as far as the property goes. But not with the structure, so we don't have to have it," said Adrianna.

That's right. According to FEMA and Sacramento County, part of the Crowl's property is in a flood zone. But not the house; and flood insurance only covers structures. The lender still refused to back down.

"They said it goes up for sale in March," said Adrianna

Adrianna says the issue came up after she refinanced her home with Wilshire Credit Corporation of Portland, Oregon, about two years ago. A July letter says the company was forcing flood insurance on the Crowls. The Crowls knew they didn't need it, but Adrianna finally called to find out what was going on.

"I thought everything was fine until I called them and asked them, and they said 'no, you're three months behind'," said Adrianna.

But Adrianna has bank statements showing Wilshire had been automatically withdrawing those mortgage payments. She says she was then told that money was being put in a trust account because it wasn't enough to cover flood insurance.

"I was devastated. I mean, I was almost in tears," said Adrianna.

She says Wilshire then told her she'd have to prove the insurance isn't required.

"And all the while we're looking for this paperwork they're foreclosing on my house becuase they said 'it's not gonna stop until you give us what we want'," said Adrianna.

So the Crowls got documentation from FEMA, Sacramento County and their insurance company stating flood insurance was not required. Since that paperwork said the insurance is now recommended, the Crowls went ahead and got it themselves for about a third of what Wilshire was trying to charge them."

Adrianna says her confusion turned to anger when Wilshire Credit sent her family a elegantly embossed invitation, offering to help save their home!

"It's cute. It looks like a wedding invitation," said Adrianna. "I can't just ship out money that people tell me I owe, if they can't show me I owe it."
 
The Crowl's insurance agent tells me Wilshire mistook the date he ran his last check on the Crowl's flood status for the date of a new flood map, but the map in that neighborhood hasn't changed since 1998, and no insurance is required.

After I called a Wilshire representative, the company apparently decided it made a mistake. Adrianna says the company agreed to release the Crowl's money and drop the demand for flood insurance. But as of today, that deal seems to be less than it appeared.

Adrianna says all she's gotten back from Wilshire is about $280, and now she says Wilshire claims she's in foreclosure because she's behind on her payments. She admits that she is behind, but that came up after the insurance threat and the company told her late payments were not the issue.

Wilshire says they will continue to work the Crowls.

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