Bank screwed us!

[columbus]

Just venting...found out thursday night by logging in to get missing tax document for a rental property(with good equity) that it is currently in foreclosure! Apparently the bank increased escrow about $50/month in October and never told us! They sent statements to the wrong address(they have our primary home mortgage too) and only called old work numbers...not my main cell that they have which I've had for over a decade. Anyway...calls and calls later it sounds like we will need to pay attorneys costs, late fees, etc and then dispute later. So frustrating...our perfect credit has been destroyed and we still dont know if the bank will fix it all. Been lied to about everything...so shady.

 

[ownyourfuture]

I've never been involved in anything like this, so unfortunately I can't give you any advice.
All I can say is that if everything you said is true, you have every right to vent.

Hope it works out

 

[Texas Proud]

I did not think they could foreclose on escrow.... and only since Oct...


Heck, I am surprised they would foreclose that quickly....


ALSO, you were making payments (I assume), so they should not be able to foreclose anyhow..... IIRC, you actually have to stop paying all together... as long as they accept some money, you are not behind....


Check it out... maybe go to an attorney and see what your options are...

 

[pb4uski]

Agreed... sounds fishy.

 

[columbus]

Yes we paid...they cashed...then they said they tried to mail checks back to us...but they supposedly went to wrong address.

 

[Walt34]

When I bought a house after my divorce the bank would routinely be late with insurance and property tax payments and I'd get nastygrams from the County and the insurance company. When I refinanced later for a lower rate (at a different bank!) I did not escrow those payments and just paid them myself to make sure they were paid on time. So there is a way to prevent this from happening.

 

[gauss]

Might be a good chance to refinance the property with another bank if possible.

Might also be a good idea to pay property taxes directly if possible and avoid escrow.

-gauss

 

[jazz4cash]

No escrow for many many years. I've been pleasantly surprised how easily several mortgage companies have agreed to this. You sound like you need to get away from those folks anyway.


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[jazz4cash]

Yes we paid...they cashed...then they said they tried to mail checks back to us...but they supposedly went to wrong address.

Did they cash the checks or send them back? If they mailed refund checks back to you they know you never deposited them.


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[ivinsfan]

Yes we paid...they cashed...then they said they tried to mail checks back to us...but they supposedly went to wrong address.

This doesn't make sense my checks all have my current address on them. I feel like we are getting only part of the story here.

 

[harley]

I haven't had an escrow account for a mortgage in nearly 30 years. The first mortgage I had the company kept screwing up the estimates and not withholding enough, so from then on I've paid (and am still paying) the insurance and taxes myself. I'm a bit of a control freak when it comes to finances, and it makes me feel more secure to know and manage what's going on myself. I've never had a company refuse to do it, over a probably 7-8 mortgage and refi lifetime.

 

[Texas Proud]

I haven't had an escrow account for a mortgage in nearly 30 years. The first mortgage I had the company kept screwing up the estimates and not withholding enough, so from then on I've paid (and am still paying) the insurance and taxes myself. I'm a bit of a control freak when it comes to finances, and it makes me feel more secure to know and manage what's going on myself. I've never had a company refuse to do it, over a probably 7-8 mortgage and refi lifetime.

I have never had one refuse, but every one has charged me a fee so I can pay on my own...

Usually the fee is $100 or so...

 

[Senator]

If your escrow was increased by $50, there should have still been enough to make the P&I payments.

The bank can only foreclose on the P&I portion, not escrow. You could have made your own property tax and insurance payments.

Somewhere along the line, you would have received a non-payment indicator for property taxes.

Who manages these properties? If it is yourself, it's time to sell.

 

[Another Reader]

Since the servicer did not accept and attempted to return the entire payment instead of crediting the P&I and billing the escrow shortage, the property probably IS in foreclosure. Whether the law and your mortgage contract permit this are the questions that need to be answered. My guess is you will need an attorney to take a hard line with the lender that services the loan.

A lot of servicing companies, especially the ones that handle the riskier loans, are bad actors. Look up the company that services the loan and find the complaints. You may also have a case for approaching the state agency that supervises mortgage lending, if your state has one.

 

[harley]

I have never had one refuse, but every one has charged me a fee so I can pay on my own...

Usually the fee is $100 or so...

Ooh! Not me. I'd probably have to really consider it if I had to pay a fee. Cheap vs. control...which one would win?

 

[Texas Proud]

Ooh! Not me. I'd probably have to really consider it if I had to pay a fee. Cheap vs. control...which one would win?

EASILY control.... I have had too many problems when I had escrow... and I did not have it that many years....


Also, I can double up my property taxes every other year for a larger itemized deduction and use the standard deduction the other years.... cannot do that with an escrow....

 

[HFWR]

Bank screwed us....

And I didn't even get a calendar...

 

[jazz4cash]

I have never had one refuse, but every one has charged me a fee so I can pay on my own...

Usually the fee is $100 or so...

YIKES! A hundred dollars? Per year or one time fee? The last mortgage we got from Quicken and I was really expecting they would resist giving me a mortgage with no escrow but they didn't bat an eye when I told them I would pay taxes and insurance myself. I assume once you have a track record they don't insist. Between the county, the insurance company, and the mortgage company there are too many chances for one of 'em to screw something up.

 

[Ronnieboy]

Also, I can double up my property taxes every other year for a larger itemized deduction and use the standard deduction the other years.... cannot do that with an escrow....

Interesting, I didn't realize you could over pay on your property taxes and deduct the whole amount you paid vs what you are actually billed....

Something I wouldn't mind utilizing when I get to the standard deduction phase...

 

[Texas Proud]

YIKES! A hundred dollars? Per year or one time fee? The last mortgage we got from Quicken and I was really expecting they would resist giving me a mortgage with no escrow but they didn't bat an eye when I told them I would pay taxes and insurance myself. I assume once you have a track record they don't insist. Between the county, the insurance company, and the mortgage company there are too many chances for one of 'em to screw something up.

One time fee when closing... kinda to try and discourage you...

They used to make a lot of money on the float... even if they tell you they do not make any... they lied...

 

[Texas Proud]

Interesting, I didn't realize you could over pay on your property taxes and deduct the whole amount you paid vs what you are actually billed....

Something I wouldn't mind utilizing when I get to the standard deduction phase...

I am not over paying on taxes....

Our taxes come around Nov.... it is due by the end of Jan...

So, I paid last years taxes in Jan... I will pay this years taxes in Dec... so, two taxes paid in the same year.... remember, we are cash basis taxpayers...


You can also double up on charity etc. etc....


I would not qualify for an itemized deduction if I paid everything in a single year.... always the standard deduction.... when I double up I get to itemize every other year....

 

[ERD50]

I haven't had an escrow account for a mortgage in nearly 30 years. ...

+1. It does simplify things, IMO.

A few years ago, my SIL was talking about how their property tax payments got messed up. She was talking about a "1st payment" and a "2nd payment", and I'm thinking in terms of our 1st and 2nd "installments" (the term here for the two payment during the year - I know this varies by locality) - and I just could not follow her.

Then it gets clearer - they pay by escrow, and the mortgage company (or escrow company?) messed up the payments 2 months in a row. I mention how I just find it easier to pay myself and avoid the middleman. Then she says "Oh, we didn't put enough down to qualify to pay our own taxes". They are very close in age to us. We could pay off our mortgage w/o blinking, they refinance with less than 20% down?

It's all a snowball effect of bad choices.

-ERD50

 

[Ronnieboy]

I am not over paying on taxes....

Our taxes come around Nov.... it is due by the end of Jan...

So, I paid last years taxes in Jan... I will pay this years taxes in Dec... so, two taxes paid in the same year.... remember, we are cash basis taxpayers...


You can also double up on charity etc. etc....


I would not qualify for an itemized deduction if I paid everything in a single year.... always the standard deduction.... when I double up I get to itemize every other year....

Ah ha,

Ours comes around Sept/Oct and is due by November, so no such luck for us

 

[MBAustin]

Sorry to hear about your troubles, Columbus. How aggravating!

I'm another "no escrow" person after my very first mortgage where the tax and insurance payments were messed up several times. I'm not sure how I found out you could get a no-escrow loan, but I've done it ever since, up-front fee or not. I think the last time it was a couple hundred dollars, which I think is outrageous, but I paid it anyway.

 

[jazz4cash]

Interesting how many ER forum members belong to the no escrow club-something I don't recall seeing in any financial advice article anywhere. I started back when GMAC was paying 10 pct on a demand note account. At today's rates, the financial gain is nil. I believe it really simplifies things if you change insurance providers mid-term like I did last year.


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