Posted on: 03rd Mar, 2009 09:29 am
Is it legal under any circumstance for a mortgage servicing company (in this case American Home Mortgage Servicing Company) to apply an overage in escrow money to the principal balance of the loan without the consent of the mortgagee? AHMSI modified my loan in November 2008. As a result of a decrease in property taxes, my escrow requirements dropped substantially. AHMSI sent me an escrow account statement in December 2008 saying there was an overage of $4,500 and I would be receiving a check within 20 days. When the check did not arrive, I called AHMSI and was told by a customer service rep that the overage would be applied to principal balance because my loan had been modified. I confirmed that they indeed applied a lesser amount ($3,400) to principal balance on 2/23/09. Nowhere in the modified loan documents does it state anything about escrow overages being applied to principal in such a case.
oh that was not a smart move on their part. You could probably consult and attorney on that one. It sounds like you would be in the right based on what you just told us.