Title company screwed me !

[John Hammons]

I purchased a new construction home in 2014. In 2016 I was informed that the taxes were done incorrectly as if the house was not on the property just using the taxes of the land. Now my house payment has doubled and I cannot afford it I do not think this is right but no one seems to care that the title company messed up. Is the contract that I signed null and void now with this double payment? Why do I have no recourse against the title company? Why am I the only person that feels this is wrong?

 

[LdiJ]

I purchased a new construction home in 2014. In 2016 I was informed that the taxes were done incorrectly as if the house was not on the property just using the taxes of the land. Now my house payment has doubled and I cannot afford it I do not think this is right but no one seems to care that the title company messed up. Is the contract that I signed null and void now with this double payment? Why do I have no recourse against the title company? Why am I the only person that feels this is wrong?

What state are you in?

 

[John Hammons]

I am in Houston, Texas.

 

[John Hammons]

I spoke with Mortgage company, they say they are "trying" to find a solution. The VA says the mortgage company should have had something already but they dont care because even though I'm struggling I am still making the much higher payment so the mortgage company is probably still just keeping me over the coals on purpose. And the title company pretty much just said "oh well". At closing I remember I was told that if the taxes were not figured like they should be I would get a check for several thousand dollars at some point and do not spend it, save it because it is for my escrow. That did not happen. So I figured the taxes were correct then here I am two years later boom. Drowning.

 

[John Hammons]

What state are you in?

Houston Tx

 

[justalayman]

How did the title company, or anybody for that matter, screw up?

Taxes on a new home would not be assessed until the certificate of occupancy is issued. Then there would be a new assessment. Since you purchased the home in 2014 the higher level of taxes would not be determined billed until 2015. If you pay into an escrow for your taxes it would not likely be realized until 2016 before the underpayment was realized. Since you were told of the issue in 2016, I would guess my timeline is basically correct so, the question is; how did anybody screw up that has caused you so much trouble? It is incumbent on you to research your tax liability for whatever value of house you are considering. You needed to know that before purchasing so, did you have a decent estimate of the tax liability before you even purchased the home?

Is the payment nearly doubling due to making up a deficit (temporary increase) combined with a new higher amount into escrow for taxes and it will be lowered once the escrow account has been repaid?

 

[John Hammons]

How did the title company, or anybody for that matter, screw up?

Taxes on a new home would not be assessed until the certificate of occupancy is issued. Then there would be a new assessment. Since you purchased the home in 2014 the higher level of taxes would not be determined billed until 2015. If you pay into an escrow for your taxes it would not likely be realized until 2016 before the underpayment was realized. Since you were told of the issue in 2016, I would guess my timeline is basically correct so, the question is; how did anybody screw up that has caused you so much trouble? It is incumbent on you to research your tax liability for whatever value of house you are considering. You needed to know that before purchasing so, did you have a decent estimate of the tax liability before you even purchased the home?

Is the payment nearly doubling due to making up a deficit (temporary increase) combined with a new higher amount into escrow for taxes and it will be lowered once the escrow account has been repaid?

From what I learned from the VA's research taxes are done in Jan here. The amount submitted in Jan 2015 was the same that was submitted in Jan 2014 only there was a house there in Jan 15 and no one bothered to check for a certificate of occupancy. So in 16 the payment doubled to catch up 15 taxes and pay 16 taxes. I was given an expected tax that would increase my payment approx 200.00. It went up almost 700.00.

 

[John Hammons]

From what I learned from the VA's research taxes are done in Jan here. The amount submitted in Jan 2015 was the same that was submitted in Jan 2014 only there was a house there in Jan 15 and no one bothered to check for a certificate of occupancy. So in 16 the payment doubled to catch up 15 taxes and pay 16 taxes. I was given an expected tax that would increase my payment approx 200.00. It went up almost 700.00.

So if the payment will go down after repayment...which i have almost made...why is the mortgage company telling me the doubled payment will always be my required payment? Hmmmm. Thank you for being smart enough to explain it to me that way. I was lacking that info and will contact them and ask that question. It is very much appreciated. 😊

 

[LdiJ]

So if the payment will go down after repayment...which i have almost made...why is the mortgage company telling me the doubled payment will always be my required payment? Hmmmm. Thank you for being smart enough to explain it to me that way. I was lacking that info and will contact them and ask that question. It is very much appreciated. 😊

As soon as your escrow account has more money in it than is clearly needed, the payment will go down. They are not allowed to collect more escrow than is needed, but it takes them a while to recognize that they are doing that. You could also possibly get an escrow refund if they significantly collect more than they need.

 

[justalayman]

I understand your anger but I'm not sure I would really blame anybody here. I also am not blaming you but in the end, the owner is ultimately responsible for having knowledge of and dealing with their own property. How is it you missed the fact the property was not assessed properly? The mortgage and escrow companies have thousands of properties to deal with and watch over. You have one. It is infinately easier for you to watch over your one property than the companies' obligation to watch over the thousands they deal with.

I hope you do find a solution in this situation as it appears it was simply a matter of "crap happens" and there really isn't anybody who is truly at fault.

Your escrow should accurately reflect your actual tax and insurance costs (or any reoccurring debts that is covers) . It does take a long time for the escrow company to adjust as they basically see a once a year snapshot of the payments in and payments out and adjust accordingly. You do need to remain vigilant regarding this matter and verify a proper amount is being demanded from you to cover the actual debts but not an excessive amount either.

While not a perfect solution as it carries the cost of the error over many many years (basically the term of
The mortgage loan) but if it is not otherwise possible to maintain your payments as they are, is it possible to roll the underpayment into the total debt? It's been a long time since I dealt intimately with mortgage lenders but it seems to me the VA was actually pro vet and the true intent was to assist the vet. Maybe there is something there if there is no other solution.

 

[Stephen1]

So if the payment will go down after repayment...which i have almost made...why is the mortgage company telling me the doubled payment will always be my required payment? Hmmmm. Thank you for being smart enough to explain it to me that way. I was lacking that info and will contact them and ask that question. It is very much appreciated. 😊

First, your payment will never go down to what it originally was because the taxes are higher. The payment should drop some when the shortage created by the increase in taxes is recovered.
Second, there may be unclear communications between you and the mortgage company. Example: Years ago as I was closing on a house I asked the mortgage company what my monthly payments would be (so I could set up an automatic deduction from my pay). They gave me the wrong number because they understood that I asked about the principle and interest only when I actually needed to know PITI. I don't know what question your mortgage company is answering but I suspect it is different from the one you are asking.

 

[Dandy Don]

Would you like to discuss this matter with a local real estate attorney who has experience with title searches and deed transactions?

Title companies have insurance to deal with situations like yours and you may have to sue them to recover damages, if any, that you may be entitled to.