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More Bank Chicanery: Double Charging on Escrow Fees

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As we have reported repeatedly, based on independent reports from numerous consumer attorneys and investors, servicer engage in numerous form of petty larceny which they pass off as “mistakes” when caught out. The problem with this excuse is that servicers are set up to be highly routinized environments, so any reasonably widespread error is not a mistake, but policy. However, it is remarkably difficult for borrowers to get servicer internal records, even in litigation, and even then, borrowers need to incur considerable costs (as in hire an expert witness) to dispute the accuracy of the bank’s charges.

Despite the general “missing in action” posture of bank regulators, one office has taken a tough stance of abuses, namely, the US Bankruptcy Trustee. A New York Post story by Catherine Curan reports that the Trustee is investigating double dipping in the New York City area by Wells Fargo and GMAC (now Ally). Borrower attorneys contend this practice is common at all servicers:

Many homeowners opt to pay part of their property taxes and homeowners insurance with their mortgage every month. The funds are then put into an escrow account and used to periodically pay the taxes and insurance.

But after falling behind on a few payments, troubled borrowers in Chapter 13 often find that their bank or mortgage servicer tries to collect twice on the escrow funds — once as part of the overall mortgage payment, and again as a separate “escrow shortage” charge.
The average double charge is about $2,000, said forensic accountant Jay Patterson of Full Disclosure in Arkansas, who sees escrow issues in half the cases he examines.

The Post does a quick and dirty calculation and guesstimates that the level of overcharges could easily be $180 million in 2011.

Now understand the asymmetry. $2000 is not chump change to most people, particularly people going through bankruptcy. Yet in aggregate, this scam over the last few years adds up to the billionish level over the last few years. The public has gotten so used to discussions of banks getting subsidies ranging in the trillions that a consumer scam in the upper hundred millions to something over a billion doesn’t register as being significant, even though, by any other standard, that would be a very large consumer fraud.

And that is what the banks rely on, that their malfeasance is a bit hairy to find and prove out, and that it is way too costly for the parties damaged (borrowers and investors) to prove the abuse exists and beat it back. In many ways, this is close to a perfect crime.

As Senator Everett Dirksen allegedly said (apropos defense budgets), “A billion here, a billion there, and pretty soon you are talking real money.”

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38 comments

  1. Fraud Guy

    And with recent Supreme Court decisions, proving a pattern of fraud is harder for citizen suits; while if you can get a class action, the usual remedy leaves the attorneys richer and most of the class still out most of what they lost.

    1. Slight23

      Coming from someone who actually works for a major bank servicer, I can firmly tell you 1) everything accused here is wrong, 2) you’ve misrepresented the story, because either way, the money wouldn’t be “bank income” but rather would remain borrower’s funds. Of course, I’m sure these facts will fall on deaf ears.

      1. anon

        “the money wouldn’t be “bank income” but rather would remain borrower’s funds”

        Just like at MF Global, right?

      2. slight change

        1) everything accused here is wrong, for which I offer no proof.

        2) you’ve misrepresented the story, because either way, the money wouldn’t be “bank income” but rather would remain borrower’s funds. All of the money stolen actually goes back to the borrower, this is how banks have been making so much money for the people who use them.

        1. PaulArt

          This is not CNBC or CNN for you to make statements without backing it up with proof. Go shill elsewhere.

      3. Dan_in_KC

        I think that part of what is missing (in both the summary and the original story) is any indication of whether the 2nd billing for the escrow fee is ‘not’ being credited to the customer’s account. Were it so – you might be right – but I only say ‘might be’. If the escrow accounts are claimed by the bank in the event of completion of the foreclosure activities then they represent an actual loss to the client that would not otherwise have occurred in the absence of this ‘mistake’.

        1. James

          Let consider what happens when a brw goes behind on the mortgage. The escrow account goes negative, becaue the bank/servicer pays the taxes EVEN THOUGH THERE IS NO MONEY IN THE ESCROW ACCOUNT. Think about that–the brw is not paying the mortgage, so the taxes are not getting paid! Therefore, the brw must catch up, by paying back the bank/servicer for last year’s taxes, and then paying this years taxes.

          I am sure, and I witness many areas of servicer fraud, but this is not one of those areas. I read this blog every day, agree 99% of the time, but this story is wrong.

        2. Dan_in_KC

          This post is probably too late – but In response to James and Dan Duncan (disregarding Frank since he appears only interested in sowing discord rather than pursing truth) I contacted the author of the New York Post article to try to resolve the ambiguity in the story.

          The ‘ambiguity’ to me was that the story raised the issue of double-billing of the Escrow fees but failed to address how the additional fees were allocated. If they were still credited to the Escrow account, or being used to compensate for taxes/insurance paid by the bank on behalf of the borrower then, as James was pointing out this was a non-issue.

          Here is Catherine’s response:

          Dear Daniel,

          Thanks for your note. The extra escrow fees are not simply held in the account for the homeowner, but are instead diverted to pay questionable fees such as late charges, or simply disappear into the banks’ coffers.

          Best regards,

          Catherine Curan


          Catherine Curan
          ccuran@gmail.com
          catherinecuran.com

          I think the above clarifies the issue at hand and (to James comment) Yves commentary does NOT reflect a misrepresentation of the story. James – if you wish to followup please address your questions/comments to Catheran Curan.

          1. KarenB

            I have a mortgage with Bank of America (have had it for a little over a year). I signed up for the automatic payroll deduction every two weeks, which equates to 13 house payments a year. All payments were paid on time, including the equivalent of the 13th payment (point being, I’m definitely not behind on any payments). But, I just found out (with no advance notice) that Bank of America increased my escrow amount by $63.00 every two weeks. And, at the end of 2011, after taxes and insurance were paid, I still had almost $900.00 in my escrow account. How can anyone say the Mortgage Lender is being fair. My credit rating is 720 – I’ve never been late on any payments to anyone — Never! And, before anyone says my property taxes or insurance have gone up; I checked on both and they have not. Is Bank of America trying to “pad their pockets” before they go belly up?

      4. Yves Smith Post author

        Oh really?

        You either don’t work for a servicer or are otherwise full of shit.

        Anyone who works for a servicer knows that trustee reports to investors, which are based on servicer data, do not provide for any breakdowns on the loan level that decompose fees, which DO go to servicers. So there is a ready mechanism for servicers to cheat. And there is abundant evidence of other types of servicer cheating we’ve found via other routes, such as inflated and double charged broker price opinions, BPOs being charged with a frequency way way in excess of what is stipulated in the PSA, and multi-month delays between when a home is sold out of REO (via court records, an incontrovertible source) vs. when investors are told it was sold. The latter means that servicers are continuing to collect their servicing fees when they are not entitled to.

        Investors like Bill Frey have told us, and we have confirmed this separately, that servicers are ALSO ripping off investors by claiming credit losses that do not exist, via inflating the unpaid principal balance to a number well over what can conceivably explained via the mortgage balance + fees.

        Better trolls, please.

  2. jake chase

    The last time I looked at a residential mortgage it required the borrower to make escrow deposits for insurance and taxes. Of course, in those days a residential mortgage was two pages long, small print and both sides I admit. When did these escrow payments become optional, and if they are optional why would any sane person make them to the bank rather than where they belong?

    1. tomk

      In my 35 years with various mortgages the tax and insurance escrows have always been optional and I opt in for convenience. I do use a small local bank where I know most of the workers, though.

      1. Fraud Guy- Also

        My experience with a mortgage owned and serviced by Wells Fargo was that, when I paid the balance down below a certain threshold, it triggered a notification from the bank that I no longer was required to maintain a taxes/insurance escrow. So I presume that, as a general matter, one of the considerations regarding whether escrows are required is the loan to value ratio.

        1. James

          No sir, in all foreclosures the mortgage has not been paid in months or years. Which means the brw’s have not paid into the escrow account for months or years–all the while the bank is paying the taxes on the home.

          ESCROW ACCOUNTS ARE ALWAYS NEGATIVE AT FORECLOSURE

          1. Yves Smith Post author

            James,

            I’m not sure how terms vary, but I have run across a number of cases where the borrower is paying the insurance and taxes. It is a decided minority of total mortgages but it is not non existent. So there would be no escrow in those situations.

  3. JefeMT

    It costs . 25% of loan amount, at closing, to waive escrows, typically.

    on another note, hot off the presses at Zero hedge, from forclosurefraud.com: gasoline for the fires of outrage Jan 2, 2012:

    “Bank Fraud
    American Home Mortgage Servicing
    Sand Canyon Corporation
    Kathy Smith
    Soundview Home Loan Trust, 2007-OPT2
    Wells Fargo Bank, N.A.

    Action Date: January 1, 2012
    Location: Maui, HI

    On
    January 2, 2012, Wells Fargo Bank and American Home Mortgage Servicing,
    Inc. (“AHMSI”) will attempt to force the Tehiva/Phillips family from
    their family home on 5305 Hana Highway in Maui, Hawaii. This has been
    the family home for over 100 years.

    Wells Fargo is acting as the
    Trustee for an RMBS Trust, Soundview Home Loan Trust 2007-OPT2. AHMSI is
    acting as the servicer for the trust.

    Wells Fargo and AHMSI have relied on a fraudulent Mortgage Assignment in this foreclosure eviction.

    The
    Assignment is dated June 24, 2010 and was signed by Kathy Smith in
    Duval County, Florida. Smith purports to be a corporate officer
    (Assistant Secretary) of Sand Canyon Corporation.

    Kathy Smith is
    not and has never been employed by Sand Canyon Corporation; she is
    actually employed by AHMSI in its Jacksonville, FL (Duval County)
    office.

    On Hillsborough County, FL, document 2010350478, Kathy Smith swore she was an employee of AHMSI on October 1, 2010.

    On Hillsborough County, FL document 20100057228, Kathy Smith swore she was Assistant Secretary of AHMSI on February 8, 2010.

    In
    the Memorandum Decision of the Bankruptcy Court for the District of
    Arizona in the matter of the bankruptcy of Anthony Tarantola, Case No.
    4:09-bk-09703-EWH, Kathy Smith is referred to on Page 5, lines 8-9, as
    the Assistant Secretary of AHMSI.

    To aid in foreclosures, Kathy Smith has used all of the following different job titles:

    • Assistant Secretary and Vice President, Ameriquest Mortgage Company (February 3, 2010);


    Assistant Secretary and Vice President, Citi Residential, Inc.,
    Attorney-in-Fact for Ameriquest Mortgage Company (April 12, 2010);

    • Attorney-in-Fact, Argent Mortgage Corporation (January 13, 2010);


    Assistant Secretary, Citibank, N.A., as Trustee for American Home
    Mortgage Asset Trust 2006-3 Mortgage-Backed Pass-Through Certificates,
    Series 2006-3; (January 13, 2010);

    • Assistant Secretary, Deutsche
    Bank National Trust Company as Indenture Trustee for American Home
    Mortgage Investment Trust 2006-3, Mortgage-Backed Notes, Series 2006-3
    (January 13, 2010);

    • Attorney-in-Fact, New Century Mortgage Corporation (January 19, 2010);

    • Assistant Secretary, Sand Canyon Corporation f/k/a Option One Mortgage Corporation (April 12, 2010)


    Assistant Secretary, Mortgage Electronic Registration Systems, Inc., as
    Nominee for American Brokers Conduit (February 25, 2010);


    Assistant Secretary, Mortgage Electronic Registration Systems, Inc., as
    Nominee for American Home Mortgage (February 18, 2010);


    Assistant Secretary, Mortgage Electronic Registration Systems, Inc., as
    Nominee for American Home Mortgage Acceptance (January 25, 2010);


    Assistant Secretary, Mortgage Electronic Registration Systems, Inc., as
    Nominee for Beazer Mortgage Corporation (January 13, 2010);


    Assistant Secretary, Mortgage Electronic Registration Systems, Inc., as
    Nominee for HomeBanc Mortgage Corporation (January 11, 2010); and


    Assistant Secretary, Mortgage Electronic Registration Systems, Inc., as
    Nominee for Taylor, Bean & Whitaker Mortgage Corporation (May 7,
    2010).

    The President of Sand Canyon Corporation, Dale M. Sugimoto,
    submitted a sworn Declaration signed on March 18, 2009, stating that
    Sand Canyon Corporation did not own or service any residential real
    estate mortgages. Despite this sworn statement of the company president,
    the Assignment in the Tehiva/Phillips foreclosure has Kathy Smith,
    purporting to act as an officer of Sand Canyon, to transfer the
    Tehiva/Phillips mortgage to the Soundview Trust. The Sugimoto
    Declaration was submitted in bankruptcy court for the Eastern District
    of Louisiana, New Orleans Division, as document 52-3, in the case of Ron
    Wilson, Case No. 10-51328.

    Kathy Smith is also not listed as an
    officer of Sand Canyon Corporation in the Florida corporate records, nor
    did Sand Canyon have offices in Florida, where the Assignment was
    notarized.

    The closing date of the Soundview Trust 2007-OPT2 was
    July 10, 2007. The trust was not authorized to acquire mortgages after
    this date; and certainly was not authorized to ever acquire any
    non-performing mortgages.

    For all of the reasons set forth above,
    Wells Fargo and AHMSI should immediately cease their attempts to seize
    the Tehiva/Phillips home. Wells Fargo should be required to produce
    Kathy Smith in court in Hawaii and to produce the records of the trust
    showing that the trust acquired the Tehiva/Phillips mortgage in 2010 as
    represented by Smith.

    Original post on this action here Hawaii Action Alert | Stop a Wells Fargo Eviction at the Tehiva/Phillips’ Home 5305 Hana Hwy Monday Jan 2…

    More docs below…

    Oh, and by the way…

    Here’s the securities administrator…

    Contact: Customer Service – CTSLink
    Wells Fargo Bank, N.A.
    Securities Administration Services
    Frederick, MD 21701-4747
    8480 Stagecoach Circle

    Telephone: 1-866-846-4526
    Fax: 240-586-8675

    Just in case you wanted to call…hint, hint…”

    Farkin bastids

    1. LucyLulu

      Do you know if Kathy Smith has an attorney? The last time I found a gaping hole in a foreclosure case, the foreclosure appeal had been filed in the name of JP Morgan as trustee, who had sold their trust business in 2007, I sent an email off to the borrower’s attorney. The borrower’s counsel was grateful for the head’s up.

  4. Jim

    As a close up and personal observer to some of these fees, we must be at least open to the possibility that double billing and other ‘errors’ in the case of default and / or foreclosure, unlike say, robo-signing, is a result of total incompetence and just plain shoddy bookkeeping and terrible computer systems.

    Having called a number of large banks on behalf of friends during foreclosure, I was appalled to find myself talking to a variety of departments, none of whom were aware of the activities of their colleagues. Often they were initiating close-out procedures and calculations that their co-workers had already supposedly started.

    I got the impression that anything out of the ordinary process of charging and accepting mortgage payments was handled as an almost manual exception, and therefore prone to a variety of mistakes, duplication and error as they were over-run by sheer volume. That no record of my previous calls apparently appeared in those systems further frightened me.

    Surprisingly, I met no large bank that could not tell me the close-out amount of a mortgage without going through a 2-4 day request process. This is a calculation that computers love to do, and I still cannot understand why it would not be programmed in to the legacy systems, available anytime, anywhere, as the above post alludes.

    If I needed any further evidence that these large banks needed to be wound down instead of saved by TARP, it was these phone calls. For the cost of sorting all this mess out one frustrating mortgage at a time, with all the attendant error and heart ache and professional fees, is appalling.

    And we have not even begun to talk about the cash bonanza these transactions represent to local firms lucky enough to be named bank representatives in the foreclosure process, charging exorbitant fees merely for getting people out of the ‘Miscellaneous’ file and in front of a judge.

    1. alex

      “we must be at least open to the possibility that double billing and other ‘errors’ in the case of default and / or foreclosure … result of total incompetence and just plain shoddy bookkeeping and terrible computer systems”

      That might be true if the errors go both ways (i.e. some are are in the bank’s favor and some are not). But are they? I doubt it.

  5. LucyLulu

    If the problem is, in fact, the result of incompetence and/or poor recordkeeping or shoddy computer systems, are there any mistakes being made in the borrowers’ favor? Any borrowers that have had mistakenly had payments credited or their mortgages recorded as paid off? I haven’t heard or read about any.

  6. indio007

    WTF haven’t the Banks double charged on?
    I don’t think there are any categories left.
    I say audit their software. I would bet you find a program that randomly applies “clerical errors” to various aspects of mortgages for the purpose of skimming funds.

  7. Fraud Guy- Also

    I do think it would be supportive of the allegation that banks are abusing escrow charges if it could be explained exactly how the economic benefits of excess escrow flow to them. As I understand it, the principal and interest in the escrow account belong to the borrower. Is there some circumstance in foreclosure where escrow balances can be swept to pay fees owed to the bank? Is there a spread the banks make between statutory interest payments and actual market rates the bank can earn on the balance (I think not, as statutory interest rates tend to be higher than market right now)? Are there opportunities for accounting shenanigans, where escrow balances are able to be funneled onto the banks’ balance sheets?

    1. James

      Keep in mind: a tax lien can wipe out a mortgage. Therefore, banks pay taxes on property even when the brw is not paying the mortgage!

      I see properties where the bank has paid $10,000 in county taxes! Because the brw didn’t pay the monthly mortgage payment (which includes the taxes and insurance piti), so the brw did not originally pay the taxes, there can be no double payment! They are asked to pay double to catch up the taxes that were not paid last year!

      That said, I see incredible bank/servicer fraud on a daily basis—just not as the article describes

    2. Yves Smith Post author

      Did you miss that these are bankruptcies?

      Any assets of the borrower de facto belong to the creditors since remarkably few bankruptcies in the US are of people who are illiquid but solvent.

      Fees, and I assume the escrow, since it is supposed to go to (among other things, taxes) are senior to the claims of the mortgage investor. So this is screwing with the priority of payments. The double escrow goes to the servicer, supposedly to satisfy claims against the escrow, but the servicer keeps the excess once the actual claims are satisfied and the escrow can be dissolved. I’ve heard NUMEROUS reports of escrow abuses, but have never gotten enough underlying documentary support to run the stories myself.

  8. Dan Duncan

    Because Progressives are the most intelligent and open-minded people on the planet, I just know you’re going to love my multi-part series on fallacies and thought distortions.

    Today’s distortion comes courtesy of either Yves Smith or The Mortgage Servicers. It’s Equivocation.

    Equivocation is an offshoot of ambiguity. Equivocation occurs when a single word or phrase is ambiguous, and this ambiguity is not grammatical but lexical.

    The end result is a statement or concept that can plausibly have two distinct meanings.

    Equivocation occurs in today’s post on Bank Chicanery with the phrase “Escrow Service Charge”.

    Is the $2000 escrow service charge going directly into the Borrower’s escrow account for the benefit of paying the Borrower’s taxes and insurance?

    Or, is it a direct fee/expense paid directly to the Bank as compensation for administering to a deficient escrow account?

    If it’s the former, and the money goes directly into the Borrower’s escrow account, then it’s still the Borrower’s money and Yves and the Post are conveniently distorting and overstating the offense…because it makes for good copy.

    When called on the shoddy reporting, they can just shrug their shoulders and claim plausible deniablity.

    “How was I to know that ‘escrow service charge’ simply meant additional monies collected for Borrower’s escrow account?”

    The answer, of course, is that you’re supposed to be an expert on these matters. You’re supposed to care about these niggling little details…even if the little details get in the way of a good, inflammatory story.

    On the flip side, if the the “escrow service charge” is fee for the benefit of the banks, then the banks are guilty by virtue of insinuating that the money is simply collected in the ordinary course of shoring up the Borrower’s escrow account. It’s a slippery, dishonest way of extracting more money from unsuspecting Borrowers.

    So which is it? Simple escrow maintenance or egregious fee extraction?

    We don’t know…because we’re dealing in the slippery, lazy, “slightly” dishonest world of equivocation.

    1. Anonymous Jones

      Ha! I suppose this comment is meant as some sort of start to dispel the widely held view around here that you are stupid!

      But if you weren’t stupid, why wouldn’t you apply the same critical eye to your own stupid assertions? Or stop using preposterous attempts at misdirection with loaded, completely inapt and irrelevant terms like “Progressive” for a escrow overcharge (!!!) story? Or at least just stop acting like a douchebag?

      Ah, the world is so complicated and so internally irreconcilable.

    2. Dan_in_KC

      Thanks Dan!

      You made clear what it was that was bothering me about the article – that being the ambiguity concerning the article.

      If these are truly escrow fees used to pay for taxes and insurance premiums then, while burdensome to the borrower, the fees are legitimate.

      If these are simply ‘charges’ applied to the borrower for the purpose of inflating the bank earnings then they are not legitimate. [and no I don't want to hear from bank shills regarding ...dead beat borrowers taking advantage of the poor naive bank loan officers...]

      The problem is that the original New York Post article fails (intentionally? or simply poor journalism?) to make it clear which. It would seem to make a better ‘story’ if fleshed out to clarify why these particular charges were illegitimate. But ambiguity is the friend of laziness when it allows a non-story to be posted as if it were a major event.

      1. Dan_in_KC

        To Clarify – my beef is with the original New York Post article.

        Jeez, after looking at all the rest of the responses (‘..did you even read the original article?..’ etc.) it seems like there is a knee-jerk reaction on the part of some to immediately assume that any reply which is not an echo chamber ‘Me Too!!’ response to Yves’ posts is somehow indicative of an attack on her credibility.

        1. Frank Speaking

          so Dan, any relation to Dan?

          we can assume unlike Dan, Dan, you can read and recognize the post is based on independent reporting from a major daily newspaper with editors, multiple source requirements and deep (deeper than bloggers) pockets to pursue for slander or liable.

          however that you read the New York Post story is clearly doubtful as the reporter made clear—with multiple sources for the story— the nature of the double dipping and clarity about the nature of the funds in question.

          “echo chamber”, “‘Me Too!!’ responses”? “If these…”, “If these…” that have been asked and answered put the lie to you mask of “aw shucks, gosh, gee wiz, I’m just saying…” defense of a bald faced ad hominem attack.

          like Dan, Dan, if it looks like a duck, quacks like a duck and shits like a duck it is a duck. enjoy your day in the pond with Dan, Dan…you know, “birds of a feather”.

          1. Dan_in_KC

            Frank – being repetitive does not count as cogent discussion so I doubt that engaging in a discussion with you will be worthwhile.

            Your argument seems to be that since the article was posted in a major newspaper that it must be true in its entirety and that ambiguity does not exist. That proposition is humorous unto itself (far more that your contribution ‘shits like a duck’ was to the old adage you like to repeat).

            You seem to simply resort to personal attacks rather that to address the points of ambiguity raised by James, Dan Duncan, or myself (and no – no relation – are you related to everyone with the first name of ‘Frank’?)

            Until you can address those issues, further discussion is a waste of time.

            Better ‘counter-Trolls’ please!

          2. Frank Speaking

            Dan Duncan’s “point” was an ad hominem attack Dan.

            Your point Dan was a back stop to Dan’s ad hominem attack.

            Further proof of you refusal to read with comprehension prior to comment, my point was tht the original story was vetted and multiply sourced in ways mere blog posts seldom if ever are.

            Nice to see your admission of performing the function of a troll.

          3. Dan_in_KC

            Frank – (while this is probably pointless since your fingers are in your ears I’ll try one more time)

            My response to Mr. Duncan pertained to the underlying questions he outlined (though I’ll agree the tone he used was annoying these were good questions)

            “..Is the $2000 escrow service charge going directly into the Borrower’s escrow account for the benefit of paying the Borrower’s taxes and insurance?

            Or, is it a direct fee/expense paid directly to the Bank as compensation for administering to a deficient escrow account?

            If it’s the former, and the money goes directly into the Borrower’s escrow account, then it’s still the Borrower’s money and Yves and the Post are conveniently distorting and overstating the offense…because it makes for good copy…”

            Your objections to the contrary – the Post article was ambiguous in this regard. So – I directly contacted the author of the Post article to ask how the 2nd billing of the funds were used. Her answer is provided under an earlier thread (search for catherinecuran.com). It answered my questions – as well as Dan Duncan’s and that of James.

            You and Dan Duncan seem to be well matched in terms of temperament…I wish you both well.

  9. Frank Speaking

    so Dan you have your homilies pre-written and fill in a few blanks and hit submit?

    you clearly didn’t read the post or any of the comments.

    and you give the appearance of being expert at promulgating fallacies and distorting thought—hallmarks of teabaggers.

    if it looks like a duck, quacks like a duck and shits like a duck—it is a duck.

  10. HMan

    The servicers use the escorow as proff of “ownership” when you go to court. I live in AZ and I had this used against me when I went through my first foreclosure. The judge asked for the receipts that had Aurora loan services name on them.

    My second foreclosure was very quick. There was actually a surplus of escorow money when the foreclosure occured. However, the Servicer claimed they couldn’t refund me because I was pass due on the loan.

    Finally, I’m on my primary residence. I called my county tax accessor and found out my taxes could be paid online. I did this and a month latter I got a letter stating I had overpaid my taxes and I would be receiving a refund check.

    Wait…I’m behind 10 months on my loan? Why would this money be “refunded” if I was behind on the loan like Aurora told me earlier? My belief is the lenders do not want you paying the escorow fees because it takes one of their defenses away. It removes one of their claims to the house. It doesn’t matter if you pay your escorow fees through the Servicer, what matters more is who’s name is on the receipt.

    I will continue paying my taxes and insurance directly. I’m not an attorney and this is not legal advice but would recommend someone trying to fight foreclousre do the same.

  11. RW

    I’ve always resued escrow/impound accounts, ever since one servicer mis-calculated the final payoff during a refinance. This eventually required me to go to small claims court to recover the almost $4000 error they made.

    I do still have one mortgage with an impound accounts. One thing I find odd is the repeated ~2-month lag between when the dollars for property taxes are removed from the escrow account according to the servicer and when the county states the funds for property taxes are paid (just days before being due).

    In any event, avoid impound accounts. They’re just another opportunity for servicer “errors” or other shenanigans that may screw you if you don’t pay attention.

  12. McTavish

    I would like to know from Yves and others if there has been any hint that the banks are engaging in sleights of hand regarding interest rates (not just the usurious nature thereof) on credit card balances, that is, actual so-called “mistakes” that really amount to continual fraud. Very few of us check these things and accept the bank’s calculation of interest charged each month. Gratefully I no longer have a credit card balance, but did carry one for many years. Any thoughts on this?

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