Year after year, my bank massively overcharges my escrow account.

New Hampshire, USA

This is a bit of a long story, so, sorry ahead of time and thanks to any and all who stick with me.

I own a single piece of land with a home, that is actually split between two different towns. As such, I owe taxes to both towns. The land is NOT equally divided. Let’s say 95% of my land is in one town and only 5% in the other (that’s just a guess.) So, I owe $3,000.00 twice a year to one town, and only $150.00 twice a year to the other. Every year, like clockwork, my mortgage absolutely skyrockets because my bank mistakenly believes I owe the $3,000.00 to both towns. Essentially doubling my escrow. Whereas my escrow account should be at about $6,300.00 yearly, it’s now at $12,000.00. Getting them to correct this issue is normally like pulling teeth, but this year is different, it would seem. They are claiming they actually paid $3,000.00 to both towns last year, which is false. I’ve contacted the town in which I owe $300.00 to, and they confirm that is exactly what was paid (not thousands of dollars as my bank claims.) I am unable to eliminate the escrow account because of PMI and I am not over 20% equity. A brief search of this company shows many, many people have issues with them and you tend to see the word “fraud” thrown around a lot. I’m scared.

I don’t have the money to pay what they’re telling me I have to. Can they just make my mortgage whatever they want? Do I have to pay what I don’t owe? What can I do? All attempts to explain this to them is met with a robot-like response claiming I’m incorrect.

 

ANSWER 1

Yes, there are limits. See https://www.consumerfinance.gov/ask-cfpb/is-there-a-limit-on-how-much-my-mortgage-lender-can-make-me-pay-each-month-for-insurance-and-taxes-the-escrow-en-200/

Consider contacting the CFPB if your lender doesn’t fix.

Is there anyway to refi it with a bank that doesn’t require escrow? Just pay your taxes directly? We have this now and it does suck to write that check but I do appreciate not having escrow to deal with.

Just because you refi with bank A, that doesn’t mean they will service your mortgage. And odds are your loan will be sold anyways.

 

 

ANSWER 2

Do you receive copies of your tax bill from each town? This is your record on what is OWED.

Have you had or requested an escrow analysis that covers that time period when the $3000 was paid to both towns? This is your record on what was PAID.

Have you contacted you tax office to see how much they got from the mortgage/escrow company? This is the amount that was RECEIVED.

Once you have those three, you can see where the error was made, who is responsible, and from whom you need to fight to get your $2700 back.

Chances are it’s an automated process doing this and easiest way is to simply overfund your escrow one year and let it be

You get the money back after the mortgage is paid off. Overpaying for 30 years isn’t exactly a realistic nor useful plan. (Not to mention that the money would have been sent to the town to pay taxes and they wouldn’t automatically “give it back” when the mortgage is paid off).

 

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