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Old 01-23-2018, 05:39 PM
 
1 posts, read 2,020 times
Reputation: 10

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Looking for advice/clarification and wisdom from you mortgage folks.

My situation in a nutshell:
8/2016 - I buy a house in California.
Escrow account is setup and handled by Bank. Smooth purchase.

4/2017 - Supplemental Tax Bill Comes (No surprise to me, CA uses the supplemental tax bill to meet the reassessed amount under a new owner).
I pay the bill.

5/2017 - GOOD NEWS from Bank. Our Escrow amount was too high and is being readjusted $200 less a month!
I do a dance.

7/2017 - 2nd Installment of Supplemental Tax Bill
I pay the bill.

11/2017 - Annual Taxes are Paid by Bank - BAD NEWS $2000 escrow shortage.
(Let me add right here that I understand that all taxes tied to my home are my responsibility.)

New Escrow amount readjusted to original amount ($200 higher) + $166.66 (Escrow Shortage in 12 payments).

Sudden adjustment of $366.66 = major financial hardship.

I call Bank.

Me, "How come my escrow collection amount was lowered when it obviously shouldn't have been."

Bank, "You were supposed to send us a copy of your supplemental tax bill. This would have given us the correct figures for your future billing."

Me, "You never asked for this. Is there no other source of data you could have used to accurately determine my taxes."

Bank, "It is not our responsibility to ask for this. Your Loan consultant should have informed you."

Me, "Damn."

Does this sound right? Did the bank goof and pass the buck? Thank you for reading and any advice/wisdom you can give.
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Old 01-24-2018, 04:34 AM
 
Location: Cary, NC
31,592 posts, read 55,307,520 times
Reputation: 30150
Maybe the bank goofed, but as you noted, the tax bill is your responsibility.

Did you not recalculate your adjusted tax escrow to confirm your balance would be adequate to cover taxes?

We never escrowed for taxes or insurance, so I am curious... Does your statement not indicate your escrow balances monthly?
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Old 01-24-2018, 06:44 AM
 
2,962 posts, read 2,869,867 times
Reputation: 2839
Regardless of who made the mistake, the taxes are yours to pay. I didn't follow your timeline. Why did you have an escrow shortage if you paid the supplemental bill? When you say "I paid the bill" that reads to me like you wrote the check and send it in as opposed to it was paid out of escrow.

If you ask me, you need to have looked at your tax bill and your escrow contributions more closely. This shouldn't have come as a surprise. If suddenly they dropped your escrow amount by $200 I'd be wondering "why?" and double-checking the numbers myself. The same way as if suddenly your after-tax pay suddenly grew by a few hundred dollars without getting a raise. I'd wonder "why?" and I'd check my paystub and maybe see "they stopped deducting state tax. But I still owe that money, I'll need to hold onto it to pay it later while I get this fixed."
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Old 01-24-2018, 10:57 AM
 
5,917 posts, read 4,054,897 times
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That happened to us except we caught it mid-stream and didn't get to the second half.
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Old 01-24-2018, 02:30 PM
 
Location: New York
2,251 posts, read 4,160,232 times
Reputation: 1607
Quote:
Originally Posted by jared83 View Post
Looking for advice/clarification and wisdom from you mortgage folks.
.....BAD NEWS $2000 escrow shortage.
.... Sudden adjustment of $366.66 = major financial hardship.
I have worked with many experiencing financial hardships. How you pay your debt obligations is called Money Management.

You have to options;
  • Spread shortage into your payment (new higher payment)
  • Pay shortage in a lump sum (keep smaller payment)
An easier solution to keep lower payments. Pay shortage via credit card (do not do cash advance % rate higher). You can probably pay directly via your county or insurance websites.

Yes - this can result is paying a few dollars more in interest.

This method allows for a lower monthly mortgage payment, and give you option to make a smaller payment on your credit card.

My $00.02 advise...
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Old 01-24-2018, 05:54 PM
 
93 posts, read 65,530 times
Reputation: 114
Is it possible that the county sent your bank a supplemental tax bill and they also paid it? The courtesy notice our county sends out looks a lot like a bill and I've had a lot of clients call to ask if they are supposed to pay it. I tell them to look it over closely and see if there's any verbiage that states the bill was sent to their mortgage company, and 99% of the time there is.

If your lender paid the tax bill, that would explain the shortage and such a large increase in your payments. The lender is looking to make up for the shortage in your escrow account and ensure there are enough funds in it when the tax bill comes due next year.

No one likes to hear it, but it was your responsibility to let your lender know of any changes to your taxes. You should have let them know when you got the supplemental bill and provided proof that you paid it so adjustments could have been made at that time.

Sorry that you are experiencing this. Hopefully your mortgage company will work with you and perhaps spread the shortage over a longer period of time so the financial impact isn't quite so harsh.
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Old 01-24-2018, 08:02 PM
 
10,265 posts, read 6,491,094 times
Reputation: 10837
Don't think of it as $366 more just as $166 more and it's not so bad for Cali where homes are expensive and the property taxes are high.
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Old 01-24-2018, 08:22 PM
 
Location: MID ATLANTIC
7,598 posts, read 17,614,249 times
Reputation: 8078
Mod Specialist gave you your answer.

If you paid the bill and didn't send to the mortgage company, how would they know taxes were missing? EVERY tax bill should go to the lender for a better escrow experience, especially a new home. They were prepared to collect the correct amount, but you paid the bill. They had to lower the bill, they are not allowed to over-collect. Basically, you screwed up the accounting. It stinks.

You can pay down your shortage for a reduced payment.

And, absolutely traxes were addressed in your closing docs.
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Old 01-26-2018, 12:00 AM
 
Location: Tennessee at last!
1,870 posts, read 1,719,956 times
Reputation: 3714
The supplemental tax bills in CA are to pay the LAST YEAR's taxes as they were a lower rate than 'market' due to the previous owner's Proposition 13 rights.

Once the house is sold the taxes are brought up to "market" value and Proposition 13's tax increase limitations is started over for the new owner.

You likely should have given the mortgage holder a copy of the new tax appraisal and new tax rate, especially since your tax withholding was reduced. YOU should have done a quick calculation when you got the appraisal and the tax information to verify that the withholdings were correct.

And you are not alone in doing this!

The person that bought my mom's cabin lost it the next year due to taxes. He actually bought it because Zillow showed that the taxes were soooo low. She had owned it since the 1970's. The taxes were way under 'market'. He had no idea about how Proposition 13 worked, and the realtor did not clue him in, even though she knew he was focusing on the taxes on the homes he looked at.

This likely happens to a lot of new buyers in CA.
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Old 02-18-2018, 12:24 AM
 
25,801 posts, read 49,697,815 times
Reputation: 19248
Yes... most of the country is totally unaware how Property is taxed in California...

On a triple net long term lease the East Coast owners reorganized for financing... the ownership did not change... just created a new entity.

Well... no one NJ bothered to fill out the Assessor form providing details of the "Transfer"

So the county sent out supplemental tax bill of $72,000 and it would be about $100,000 the next full year... all because a form was not submitted.

I spent hours back and forth as the go between to get it all ironed out... took about 6 months from start to finish.

The business would have closed it's doors had the tax increase held...

The real problem is the East Coast Owners didn't have a clue when it comes to property taxation in California...
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