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Mortgage Expert Question


Quartermoon
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A friend of mine discovered that the mortgage company (bank) took escrow out to pay the taxes on his mortgage but the payment went up considerably. (400.00) He phoned to find out that the bank never paid enough and sometimes not at all, now he is charged late fees by the taxes city and state. Is there something that can be done?

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Wells Fargo on a few occasions over the years has been late in paying my property taxes, which are rolled into my mortgage payment. I never realize it, though, until I get the notices from the city or county saying "we can seize your property if you don't pay." :shock: Usually Wells Fargo is already working on correcting their oversight by that time, but it's still unnerving to open that type of mail. They have always paid any late fees or penalties and your friend's bank most likely will, too. S/he needs to insist. Also, it's not unusual for a mortgage payment to increase if the escrow is short. Due to a tax hike in my city my mortgage payment just got bumped up $129.

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There are rules that lenders must follow when they are withholding escrow payments as part of the mortgage.

First and foremost they must send out an escrow account analysis once per year to determine how much should be withheld each month. It is a report which runs a trial balance to make sure that there is adequate reserves in the account to pay when taxes and insurance are due. They are allowed an excess of two months balance as a cushion. Any excess must be repaid to the borrower.

I would request a copy of this from the lender, and find out exactly what is going on.

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