Seeking Advice on Lender-Placed Insurance Dispute After Loan Payoff

[Mergim Kacija]

Hello BP,

I'm hoping someone here can provide insights on an issue I'm dealing with. I took out a 12-month hard money loan with HouseMax Funding, a reputable lender, for a fix-and-flip project. Before closing, I was required to purchase 12 months of insurance, which was paid from escrow at closing. When I sold the house 120 days later, I noticed a $14k charge for lender-placed insurance on the closing statement.

I reached out to the lender and provided proof of my coverage during the loan period. HouseMax agreed that I am owed the full $14k, but they informed me that the "investor" and loan servicer (FCI) are refusing to refund the amount.

I'm unsure who should be held accountable or what my legal rights are in this situation. If anyone familiar with lending law could offer some guidance, I’d greatly appreciate it.

Thank you,
Mergim