Escrow Trouble Do I Have Recourse? (PMI, loan, 2015, property tax)

[dsf767]

All,

I recently purchased a home (3 months ago), this home was a complete gut and remodel (a company bought it and flipped it). it got a new roof, new windows, new septic, new HVAC (heat and central AC), new kitchen/bathrooms, flooring, basically everything.

The tax assessment for 2014 was $3,938 and the tax assessment for 2015 is $3,963 so not much of a change.

Now my Home owners insurance is $1,025 for the year which I paid a year in full but I understand they want to also take that in escrow so when its due next year they can pay it.

So in my escrow account will pay out $4,988 over the course of the year.

however here is where the trouble comes in my loan servicer is right now taking a whopping $745.95 per month which over a 12 month span equals out to $8951.40 so if I do my math that is a $3,963.40 overpayment which is $330.28 per month (if I add my current years tax plus homeowners insurance and subtract that from the $8,951.40).

Now I know I will get that back next year when they reassess the property however its seem very shady that they can take that much and hold it hostage from me for a whole year.

Could they be holding this much because they were afraid of the tax bill taking a huge hike because of all the work done to the property so they want to have excess in there for when the 2016 tax assessments are done?

it just seems to me that they are taking way to much of a cushion for themselves and in turn it hurts me because I have to have this far excessive escrow payment to make.

Now all that being said I can comfortable afford to pay it, that's not the issue here it just seems like they should not be able to hold this much extra money hostage from me every month, I could see them maybe taking an extra $1,000 to cover themselves but double just seems wrong.

Also it should be noted that the taxes on the GFE were not listed this high, I was at the closing table and saw the hiked up numbers and was for sure taken by surprise.

I should also not my town takes tax payment semi-annually not quarterly like most town could it be some kind of mistake because of that?

Do you think I would have any recourse if I called them or are they just going to give me the line that I have to wait until next year?

[Smooth23]

I would have them correct it based on the most recent actual assessment, and not allow them to take a penny more. Any difference at the end of the tax year you can make up out of pocket.

[Dora123]

Just as Smooth said, you can contact them and ask them to recalculate.

[piyf]

They also don't have to pay you back the overage. They can deduct what you will owe with how much you have in it for next year.

[SmartMoney]

Just a thought, you don't have PMI in your payment by any chance?

Chances are they are using estimated taxes , only because the tax bill may not be available. Contact their servicing department and request an escrow analysis. If they refuse, contact your elected official's constituent services and request assistance with your request.

[Modification Specialist]

This week have spoken to 5 homeowners with escrow problems.. (it must be the weather....lol..)

Your case
Taxes $3,963
+ HO $1025
= $4,988/ 12 = $415.67 monthly

Like SmartMoney above says contact the lenders customer service department and request an escrow analysis (review). Forward a copy of your home owners insurance dec page and mortgage tax statement to them. With most lenders it takes approximately 30 to 60 days to adjust your payment.

FYI - now and in the future if your loan transfers servicers. Make sure the new servicer has the correct payment address for taxes and insurance to forward funds from of your escrow account. It is a common mistake made by servicers that the homeowner has to pay for.

Just took in a case - borrowers were making the full PITI payments on time, even sending in extra. First year and second year lender refunded money left over in their exThree years go by, got notice the county was getting ready to proceed with a government foreclosure. Their escrow-payment was included in the mortgage-payment, the lissue was the lender didn't have the correct address to pay the HO Insurance and Taxes.

It's like taking to a brick wall, their mistake caused the problem. It is ultimately the borrowers responsibility to make sure the taxes and insurance are paid, even through the mortgage company is supposedly making the payments..(figure that out........)

Got the address strengthen out with Lender where it send the payment too. Lender immediately paid the tax shortage. Then lender increased borrowers payment $1000 per month. This cause them to miss payments and end up in foreclosure with the lender. Point - this is something to stay on top of to avoid a problem like I just mentioned.

Good Luck


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[Lacerta]

Did they not collect enough at closing, so that when they paid your property taxes and/or taxes in the last 3 months, it put them short? If the account is short, for whatever reason, they can require you to make up the difference. Given the amount extra they are charging, it sounds like maybe no escrow was paid at closing at all.

There are very strict rules on escrow accounts. The person who said they don't have to refund you is incorrect. Once per year (unrelated to when they do the assessment...mine is reviewed in December every year), they have to assess what their minimum balance was for the year. If that minimum balance is more than (taxes+insurance)/6, they have to refund you the difference. This is also the time your monthly payment gets rebalanced, depending on whether you have a shortage in your escrow account, or taxes and insurance changed rates. For example, in your case, if they had to pay out $4988, then if their minimum was higher than $827.16, they have to refund you any overage.

Oh, and I didn't know there were towns that do taxes quarterly. Mine is also semi-annually. I thought most were.