Jump to content

Mistake w/prop tax and homeowner's ins


California Dreamer
 Share

Recommended Posts

What recourse do I have when the lender made a mistake calculating my payment? They did not charge me correctly for Prop Ins or Homeowner's insurance. Now I am paying an additional $600 per month to make up for their mistake. $300 for 12 months to make up for 2003's taxes & insurance and $300 here on out for taxes and insurance that weren't originally included.

Link to comment
Share on other sites

I am not really sure on the legal options that you may have for incorrect ESTIMATES on escrow accounts, and the withholding on these accounts, but, i will say that a competent loan officer (and the lender) have this information as they are preparing your loan.

It's not all that hard to figure out. Simply take the annual homeowners insurance premium and divide by twelve. Properrty tax information is provided by the title company when title insurance is ordered. I will say that refinances are a little more difficult, because there needs to be adequate reserves established because of the due dates of property taxes and insurance expiration dates, but still achievable. (nothing gets a consumer more fired up than to tell them that 10 months of homeowners insurance needs to be held in escrow because their premium is due in two more months, so we have to add another $500.00 to your closing costs)

If there is recourse on improper calcualtion of escrow esimates, then I serously doubt Ameriquest would be in business any longer, because they do this stuff all the time. It always helps the "look at how much you are saving BS line." Of course I was reading the other day about a husband in Southern Cal went in and killed a loan officer for putting their home into a bad mortgage, but I don't recommend those extremes.

Just to note, that Indianapolis foreclosures were studied, and the major issues which caused foreclosures was this very same tactic, coupled with the payment shock of 2/1 buydown mortgages. (It helped many who may not have been able to afford the payment to afford the payment, without really giving a hoot about their success or future.

Link to comment
Share on other sites

The wholesale branch of Washington Mutual in Irvine, CA calculates property taxes as 1.25% on purchases in California, even with proper proof that they'll be otherwise. It's hard to have any recourse other than to be pissed off at the lender. They are just estimates like amortgageman said, and you can actually stop your escrow account if you wish and just pay those items on your own.

If I were you I'd go into your lender's local office and make a stink about it, loudly, so other customers can hear. I'm sure they'll give you a little more attention than a 1 on 1 over the phone.

Link to comment
Share on other sites

Doggone if this very issue did not come up with a new client yesterday. Very same story with the lender I had mentioned in the earlier post.

RESPA Section 10 is all about the handling of escrow accounts, and a quick read, only states that the lender/servicer must disclose annually your anticipated escrow balances, and the minimum balance may not exceed more than two months of escrow payments. This is the statement that you probably just received.

You do have a couple of options though, and maybe one RESPA violation (if applicable).

1) You can pay off the escrow shortage in one lump sum and reduce your monthly payment by the amount of being deducted for escrow shortage. From your explanation, this would involve a separate payment to your escrow account of about $3,600.00. If you take this action, be sure to indicate on the check that this is to be applied to your escrow account, otherwise the payment may go into your regular mortgage.

2) It may be possible (at lender discretion), that they can stretch your escrow defiency for more than one year (maybe a two year repayment plan), or you could possibly negotiate with the lender that they waive the two month cushion, which they are allowed to have by RESPA law (this would lower the escrow portion by about $50.00/ month). Again, this is lender discretion only.

Also at lender discretion, you may be able to eliminate the escrow account (as liverichly indicated), but you would also have to pay back the escrow defiency at that time, or they most likely would hold your mortgage payments in a suspense account, whidh would cause mortgage lates, and more problems than you would like to imagine.

Finally, there could be the possibility of a RESPA violation, if the lender did not provide you with an escrow account disclosure within forty five days of closing. Most of the time, this disclosure is provided to you at closing, but by law, the lender must provide the disclosure within forty five days. This disclosure should have been read, and everything could have been worked out at that time.

Link to comment
Share on other sites

  • 5 weeks later...

How and when do the property taxes get assessed? I mean the home we are looking at has property taxes TWICE what the other 3 homes in the same neighborhood list for. One home has a ppol in back and approx 2000sf, another is 1750sf with a 480sf shop in rear, but this particular home is 2176 sf listed with prop taxes twice that of the others. WHY?

This home used to have a pool in rear but is filled in now. Also heated/cooled protion of home is 2176 but has 2 car garage and 2 added rooms for a shop out the rear of the house with a screened porch.

Will they reassess this tax if I were to purchase?

Link to comment
Share on other sites

It could be that when tax assessments came out and the taxes went way up, the other home owners contested the increase, and got their taxes lowered, and the home owner of this home did not care or know how to do it etc. In most areas of the country that I know of, if you think that taxes are wrong, you can get an appraisal and take it to the tax commission. The one exception that I do know of is California, where your taxes dont go up while you live there, and so this home may have changed hands and the others have not.

Charles

Link to comment
Share on other sites

Other times, property taxes can be calculated differently when there are "homeowner's exemptions" or credits for the homeowner. For instance a homeowner who actually resides in the home may pay less tax than a person who owns the home, but the home is not actually their primary residence.

Link to comment
Share on other sites

Guest
This topic is now closed to further replies.
 Share

×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.. For more information, please see our Privacy Policy and Terms of Use.