Legal Question in Real Estate Law in Indiana
Escrow management
Our loan company projected false amounts for a short period on our property taxes. We had them correct the tax amount to project what we should actualy be holding back. However, after we recieved our escrow analyses they show for that period they were being billed wrong we are behind. They say we have to pay the 500.00 dollars back to our escrow account that they never even paid the state to begin with. They want us to pay money into our escrow for there mistake instaed of correcting there error. We have made 50 phone calls and we never get the same person and no one ever knows whats going on. They do not want to help us and all they care about is collecting money. How can I resolve this?
1 Answer from Attorneys
Re: Escrow management
You should make a "qualified written request" to your mortgage lender. See the US Department of Housing & Urban Development's sample letter at http://www.hud.gov/offices/hsg/sfh/res/reslettr.cfm for a great template on how to write one.
Your mortgage lender is required to acknowledge your qualified written request within 20 business days of when they receive it, and the lender is required to resolve the complaint within 60 business days by either correcting the escrow amount, or by giving you a statement of reasons for its determination.
Some additional info:
The law allows a mortgage company to estimate the total of taxes, insurance, and other charges, divide that by 12, and tack it on to your mortgage payment. The mortgage company may also "cover" itself by collecting up to an additional 2 months of escrow payment--that extra is permitted so that the mortgage company has some funds available if a payment is missed or if the estimate is lower than actual.
The situation you're in can be very frustrating, since the consumer rarely has much control over the escrow amount paid. And the situation you're in is relatively common--winding up with an escrow shortage due to the mortgage company's underestimate, or miscalculation of taxes, or making an overpayment of taxes, etc.
If you feel that the mortgage company has miscalculated the escrow amount, or is requiring that you pay more than they are legally allowed to collect (basically 18 months of the estimated monthly costs), you should make a "qualified written request" to your mortgage company. Use the sample form that HUD provides, and you'll have all the necessary components for a good written request.
PLEASE REMEMBER that you MUST continue making your mortgage payments during the time you're making the qualified written request and during the time the mortgage lender is resolving it.
HUD also provides a nice discussion of common escrow questions and concerns: http://www.hud.gov/offices/hsg/sfh/res/respafaq.cfm
Good luck as you proceed; I understand how frustrating the process can be, since I've had to go through it a couple of times myself! Get your qualified written request sent off ASAP, and hopefully you'll have a reasonable solution soon.
All the best,
Marissa Bracke
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