Legal Question in Real Estate Law in Illinois
I am in the process of refinancing my home in Illinois, McHenry County. The current lender states they will not give me a refund on my escrow account. Instead they say they are including it in my payoff balance towards the principal and state that this is a credit and I can take that credit to re-establish an escrow acct with new lender. My new lender states they cannot take that money from the principal and apply towards an escrow. I feel that my old (current) lender has no business taking my escrow money and applying towards principal. They didn't ask me, they didn't notify me about that. I found this out from my new lender that I will be refinancing with. The current lender should give me a refund check on my tax money that I have already paid to them for escrow. If they are allowed to just apply towards my principal I will have to come up with extra money for an escrow account with th enew lender. This is my money, don't I have the right to tell them how I want it applied? How can they take tax money and apply to a principal and without my consent??
Can I make the current lender give me a refund check? There is approximately $1,300 in the account.
1 Answer from Attorneys
Honestly, if you are worried about coming up with money at closing, getting a reduced payoff is to your benefit. If the old lender was not giving you this credit, they would not give you your escrow balance until up to thirty days after they receive the payoff check from the closing agent, so you would need to front this money until you received this check.
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