Mortgage Escrow Account Errors
My most recent mortgage statement for our rental property (originally our primary residence) included the annual escrow review, and I was surprised to see that they projected a shortfall between the escrow expenses (taxes, insurance, and allowable reserve) and my monthly escrow deposits. In fact, the difference was such that the mortgage company was raising my monthly mortgage payment from $691 to $818.
At first glance that did not seem logical to me — we’ve been paying this mortgage for almost 6 years and never had the payment go up like that. Further, our taxes have remained stable the last two years and we haven’t changed our home insurance since we converted it to a landlord policy.
Busy at the moment, I put the bill aside and just returned to it today. After careful, line-by-line reading, I discovered that the mortgage company planned to pay my annual $953 property tax both in May and November — not half every six months, but the full amount twice a year.
Interestingly, when I finally got on the line with a real human being, I was told not to worry because the company only pays bills that come in and they wouldn’t actually pay that amount twice if they weren’t billed accordingly.
“Right,” I said, “But see, I’d really rather not pay an extra $100 a month for a bill that’s not going to come.”
“Oh, that does make sense. Let me connect you to someone who can help you.”
The next CSR greeted me with, “So you want us to pay your tax bill annually instead of semi-annually?”
So I explained it all over again and she re-worked the escrow account while I waited. Turns out my payment would only go up an extra $2 a month once she corrected the escrow problem.
“But there’s also now an overage in your escrow, so would you like me to send you the extra $132?”
I suggested that they just apply $24 to the account to keep my payment from changing and send me the rest.
Pause. “Oh no ma’am, I can’t do that. My computer can’t do that.”
And these are the companies we’re bailing out with taxpayer funds?
