Screw up on Escrow Account

[Whiskette32]

What is the name of your state?What is the name of your state? Illinois

A little over a year ago we refinanced our mortgage. On the good faith estimate, it shows that both payments for the property taxes were included. However, we were just notified a few months ago that the mortgage company screwed up and only took out for one of the two property tax payments. Our payment has gone up from 1080 to 1227 for the next year to try and catch up in escrow. I looked back through the paperwork and sure enough it was not taken out at the closing. We did not have a lawyer for the refinance, and we did not catch it ourselves. My question is, is there a limit to how much can be requested per year from the mortgage company to catch up? (Obviously we refied for a reason - to lower our payments - and now they are back up to what they were before. This is creating a hardship for us.) It just seems to me that it was their screw up and now we are suffering for it. Are there any issues I can pursue legally because of the mistake?

Thank you,

Jennifer

 

[HomeGuru]

What is the name of your state?What is the name of your state? Illinois

A little over a year ago we refinanced our mortgage. On the good faith estimate, it shows that both payments for the property taxes were included. However, we were just notified a few months ago that the mortgage company screwed up and only took out for one of the two property tax payments. Our payment has gone up from 1080 to 1227 for the next year to try and catch up in escrow. I looked back through the paperwork and sure enough it was not taken out at the closing. We did not have a lawyer for the refinance, and we did not catch it ourselves. My question is, is there a limit to how much can be requested per year from the mortgage company to catch up?

**A: no since the lender is acting as the escow company collecting the money in installments and making the payments when due. It is considered a "pass-through" since the lender does not get to keep any of the funds. So if the real property taxes or insurance was $20K for the year, the lender has a right to collect this amount in order to make the payment.
**********

(Obviously we refied for a reason - to lower our payments - and now they are back up to what they were before. This is creating a hardship for us.) It just seems to me that it was their screw up and now we are suffering for it.

**A: was this a cash out refi? If so you got money, that should have been used to pay the taxes.
*******
Are there any issues I can pursue legally because of the mistake?

**A: no, read your documents. The lender is not liable. Who did the escrow closing?
******

Thank you,

Jennifer

**A: no problem.