It started like this…
A couple of weeks ago, I came back from a trip. My husband had plopped the mail down on the couch, so I sat down and started going through it. A bright pink postcard immediately caught my attention so I picked it up. “We have still not received your property taxes! Please pay immediately to avoid further fees!” I logged into my county’s tax site and sure enough…my property taxes were 3 months past due and had gained some pretty hefty late fees.
Next, I logged into my mortgage account and started going through the documentation. Escrow was paid every month like normal. I had a receipt in my account saying property taxes were paid.
I started going through all of the transactions in and out of my escrow account to see how much our mortgage company paid in taxes. There were some serious discrepancies. The amount they actually paid was thousands less than it should have been. In fact, it looked like the county sent the refunded the tiny amount that they HAD paid. Awesome.
So I called the Mortgage Company…
The Nice Man at the Mortgage Company assured me that yes, my taxes were paid in full and that he would have his team investigate why the county/city tax office was saying they hadn’t received any money yet. “One more thing,” he said as I was about to hang up. “I see that you are about to receive a large check in the mail for overpayment into the escrow account. Please don’t do anything with it until we get this sorted out.”
“Ok. How large are we talkin here?”
He quoted me the EXACT AMOUNT of money I paid into escrow for all of 2016 and then some extra. Naturally, I was shocked. I calmly told the Nice Man that had to be wrong and explained why. Our conversation went south fast.
“We’ll have to call you back. Someone will call you back”. He couldn’t not wait to get off the phone and practically hung up on me (seriously).
I called back again the next day to follow up on the “investigation”, and finally talked to someone who wasn’t so eager to get off of the phone. He agreed that something definitely was wrong and that they would investigate. I also double checked to make sure that Mortgage Company would pay for any late fees that had accumulated in 3 months. He assured me that they would be responsible.
Finally, after two weeks, my Mortgage Company admitted they were at fault and quickly paid my taxes. They also paid all of the delinquent fees out of their pocket and apologized for their serious error. Apparently, they had calculated the correct taxes originally, but their software somehow sourced the wrong plot of land. (Why is it always the computer’s fault?)
Is this normal?
Since this has never happened to me before, I called someone I trust who is familiar with the banking industry. They told me that this kind of thing does happen, but that there are lines in my HUD-1 that states that the lender is required by RESPA to apply or pay your property taxes on time. I checked my closing docs and found the line that they were referring to.
Fortunately, in my case, things were fixed quickly. My Mortgage company admitted fault, and I was not held liable for any damages. Things could have been a lot worse.
If your mortgage company doesn’t pay your taxes, they could get in trouble. So could you. Here is an article written about steps you can take to get any property tax issues fixed. According to credit.com, I probably should have handled this situation by getting things in writing and not over the phone. Things to note for the future…
While I’m glad that everything is fixed, I’m a little wigged out by all of this. This is a major banking institution that messed up….Most people have heard of them and I considered them a safe bet. But their screw-up could have really caused some serious problems (like a lien on my house!).
This is just one example of why you should alway watch your accounts. No one from the Mortgage Company even realized they had made a serious mistake. I should have paid attention to the amounts taken out of my escrow account and questioned why they were so low. I should have gone to the county’s tax website to make sure that my taxes were paid. Now I know….
Has your mortgage company ever screwed up your property taxes?