Legal Question in Real Estate Law in Iowa

1 week ago I closed on a re-finance on my home. This week I was notified that they had not calculated my escrow account accurately, forgetting to include the adjusted property taxes since my home was new last year when I purchased it. I was told that I would have to pay $2400. for Septembers taxes and then pay an additional $400 per month on my house payment/escrow. I had changed from Chase Mortgage 30 year fixed at 3.75% to a 20 year 3.87% fixed rate. The lender has offered to re-write the loan to 30 years and try to get my interest rate back to 3.75% to keep my payment at a reasonable level. My question is there anything else I can do? I was in the middle of purchasing a new vehicle which thankfully I was able to stop because of this mess and I'm wondering if I have any recourse.


Asked on 9/04/14, 4:35 pm

1 Answer from Attorneys
Thomas Moens Moens Law Offices, Chartered

I can understand how this would be frustrating. The problem is that you are responsible for the real estate taxes one way or another. Basically, someone made a mistake by not catching this sooner. However, consider if they had caught it sooner. You would have ended up paying the $2,400 as well as the extra $400 per month right out of the gate instead of it coming up after your closing.

I will say it is confusing to me why you would be refinancing at a higher interest rate just to reduce the term of your loan. Even if you were not aware, the lender should have informed you that you could have just paid extra on your old loan and had it paid off in twenty years without refinancing. But, now that they have reduced your interest rate to what it was before, it seems a case of "no harm no foul," assuming the fees you paid were not significant.

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Answered on 9/05/14, 5:54 am


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