Posted on: 12th Apr, 2009 07:01 am
I live in the state of Florida. Every month I pay extra money to my escrow account to ensure a) that no shortages occur during the year due to increases in Home Owners insurance premiums b) no shortages occur during the year due to increases is real property taxes.
I realize when the annual escrow analysis is completed I will be refunded any funds exceeding the two month escrow cushion required by my lender. However my lender sent me a significant refund then increased my monthly mortgage payments to cover the escrow shortfall. This shortfall was the result of a slight increase in the annual HO insurance premiums (this is the purpose for paying extra each month into my escrow account to begin with) :? .
As I have done in prior years (without any problem from my lender) I pre-paid the shortage and asked for a new analysis after applying the up front shortage payment in order reset my monthly payments back to what they were prior to the increase (which the lender should have taken into consideration before sending me a refund initially :x ).
I followed the procedures as instructed by my lender to the letter only to have the money returned to me once again and once again my payments were increased.
Somewhat annoyed I personally went to the branch who called the mortgage department on my behalf. I was informed that it is not my priviledge to attempt to keep my payments from increasing by paying extra into escrow. I pay my mortgage online with my lender who by the way offers the option to pay money directly into the escrow account.
The increase was only $19.41 monthly. A slight increase this year, followed by a slight increase in following years could have a cumulative affect that I wish to avoid.
I've never had this issue in the past, my lender has happily taken my payment and reset my monthly payments back to the amount it was prior to the annual analysis. Has something changed, a new law perhaps (I am aware that Respa will not permit a lender to maintain more than a 2 month cushion in escrow) that says a consumer is not permitted to pay up front any escrow shortage in order to avoid having the monthly payment increase? I've paid prepaid shortages with this lender in past years. Mortgage lenders I've dealt with previously have covered any shortages to avoid increasing my monthly payments before refunding excess escrow funds to me. Priviledge????? Its a priviledge for me to pay them money?????
My lender by the way is Bank of America, who has treated me very well in the past. Priviledge my foot, they are recieving tarp money (as a tax payer thats my money) I'm footing the bill to keep them in business and they tell me its a priviledge for me to pay them money to keep my payments within my budget????? :twisted:
Is this one of the reasons Bank of America is in danger of financial failure? Are they directly contributing to increased mortgage payment of their consumers by prohibiting them from taking measures to avoid these payment increases until the consumer can no longer meet the mortgage payments as a result. This seems to me to be detrimental to their bottom line by creating the potential for a foreclosure situation.
I realize when the annual escrow analysis is completed I will be refunded any funds exceeding the two month escrow cushion required by my lender. However my lender sent me a significant refund then increased my monthly mortgage payments to cover the escrow shortfall. This shortfall was the result of a slight increase in the annual HO insurance premiums (this is the purpose for paying extra each month into my escrow account to begin with) :? .
As I have done in prior years (without any problem from my lender) I pre-paid the shortage and asked for a new analysis after applying the up front shortage payment in order reset my monthly payments back to what they were prior to the increase (which the lender should have taken into consideration before sending me a refund initially :x ).
I followed the procedures as instructed by my lender to the letter only to have the money returned to me once again and once again my payments were increased.
Somewhat annoyed I personally went to the branch who called the mortgage department on my behalf. I was informed that it is not my priviledge to attempt to keep my payments from increasing by paying extra into escrow. I pay my mortgage online with my lender who by the way offers the option to pay money directly into the escrow account.
The increase was only $19.41 monthly. A slight increase this year, followed by a slight increase in following years could have a cumulative affect that I wish to avoid.
I've never had this issue in the past, my lender has happily taken my payment and reset my monthly payments back to the amount it was prior to the annual analysis. Has something changed, a new law perhaps (I am aware that Respa will not permit a lender to maintain more than a 2 month cushion in escrow) that says a consumer is not permitted to pay up front any escrow shortage in order to avoid having the monthly payment increase? I've paid prepaid shortages with this lender in past years. Mortgage lenders I've dealt with previously have covered any shortages to avoid increasing my monthly payments before refunding excess escrow funds to me. Priviledge????? Its a priviledge for me to pay them money?????
My lender by the way is Bank of America, who has treated me very well in the past. Priviledge my foot, they are recieving tarp money (as a tax payer thats my money) I'm footing the bill to keep them in business and they tell me its a priviledge for me to pay them money to keep my payments within my budget????? :twisted:
Is this one of the reasons Bank of America is in danger of financial failure? Are they directly contributing to increased mortgage payment of their consumers by prohibiting them from taking measures to avoid these payment increases until the consumer can no longer meet the mortgage payments as a result. This seems to me to be detrimental to their bottom line by creating the potential for a foreclosure situation.
Hi jimspalding!
Welcome to forums!
I think this is quite a normal situation. Usually when there is an escrow shortage, the lender may increase your payments. Taxes and insurance costs are estimated. However, you should note that the mortgage company has to review the escrow every year and make adjustments on an annual basis. If there is an escrow overage i.e. if your overage amount is more than 2 months worth of your escrow payments, then the overage will be refunded to you. After that, if the lender finds that your property taxes have increased, then he has the right to increase your monthly payments.
Feel free to ask if you have further queries.
Sussane
Welcome to forums!
I think this is quite a normal situation. Usually when there is an escrow shortage, the lender may increase your payments. Taxes and insurance costs are estimated. However, you should note that the mortgage company has to review the escrow every year and make adjustments on an annual basis. If there is an escrow overage i.e. if your overage amount is more than 2 months worth of your escrow payments, then the overage will be refunded to you. After that, if the lender finds that your property taxes have increased, then he has the right to increase your monthly payments.
Feel free to ask if you have further queries.
Sussane
boy you took this thing far further than it needed to go, jim. you took the word "privilege" out of context and used it to your own purposes to leave a diatribe about the current economic situation. i don't think bofa is leaving itself open for potential foreclosures by making miniscule mistakes in the escrow analysis portion of its business.
believe me i am not an apologist for bofa, either. i once worked as a contract underwriter with their mortgage company (wholesale), but they never paid me a dime, and the only largesse we got as workers there was when the district manager used to go out and buy ice cream bars on the occasional friday; and i got to attend their annual christmas party. whoop-dee-dee!
what they've done is perfectly normal, except they erred in sending you back too much and compounded the error - in your estimation - by increasing your payment.
you know how escrow works, and you also probably are aware that humankind is imperfect. yes, i know that machines do the work of man these days, but who input the data into the machines? yep...it was man.
"forgive them, for they know not what they do" - a perfect description of what we just celebrated (Easter); but it is also a perfect description of bofa and countless other mortgage servicers who make mistakes on a regular basis that allow us all to post our commentaries.
i know...i could have shortened this, but it's hard to stop once you get rolling. as for your issue, jim - i don't think you've got much of a leg to stand on.
believe me i am not an apologist for bofa, either. i once worked as a contract underwriter with their mortgage company (wholesale), but they never paid me a dime, and the only largesse we got as workers there was when the district manager used to go out and buy ice cream bars on the occasional friday; and i got to attend their annual christmas party. whoop-dee-dee!
what they've done is perfectly normal, except they erred in sending you back too much and compounded the error - in your estimation - by increasing your payment.
you know how escrow works, and you also probably are aware that humankind is imperfect. yes, i know that machines do the work of man these days, but who input the data into the machines? yep...it was man.
"forgive them, for they know not what they do" - a perfect description of what we just celebrated (Easter); but it is also a perfect description of bofa and countless other mortgage servicers who make mistakes on a regular basis that allow us all to post our commentaries.
i know...i could have shortened this, but it's hard to stop once you get rolling. as for your issue, jim - i don't think you've got much of a leg to stand on.
To smith.sussane
Thank you for the welcome. Yes I'm aware that this is normal, since the analysis is performed annually in January prior to the lender receiving the annual HO renewal. I have always prepaid any increases up front and never had an issue with this lender. I was curious with everything going on these days on the Hill if RESPA may have been amended clearly prohibiting the customer from prepaying in a lump sum any increases to their annual escrow in order the keep their payments from increasing. I don't believe there has been such a change.
gmakerley
Respectfully I disagree with you, I was extremely angry with BOA to say the least over the verbiage used (priviledge) the very moment the BOA associate said it. At that particular moment I was not aware that BOA was receiving TARP funds. The associate's tone was disrespectful and her comments even shocked the branch associate, who I must admit could not apologize enough. I did feel empathy for the branch associate, she was clearly embarrassed.
As a reminder I stated that I have prepaid increases in the past on this very account without any problem. Furthermore if I as a customer don't have this so called "priviledge" then the online option to pay additional funds directly into my escrow account would not be offered.
I dont' believe I took this matter further than necessary. With all due respect to you the ice cream story, although entertaining appeared to be a momentary side track, yet is just another example of BOA's treatment of others. However, I do believe you were attempting to provide me with a long version explanation to support that you were not in any way acting as an apologist for BOA.
As far as my not having a leg to stand on, I mean no disrespect but I believe you to be entirely mistaken. The bank did finally apply my prepayment and reset my monthly payments back to the amount they were prior to the increase. Could it have been something I said such as closing every account I have with BOA be they assets or liabilities to a different financial institution?
Furthermore, considering the treatment that I received after having been a loyal customer for 20 plus years and having had several accounts with this bank, I decided to do a little shopping. To my amazement, when inquiring of other financial institutions (without mentioning who I bank with) about this situation and gathering material on their services; each and every financial institution I visited said "You must bank with BOA". The financial institutions (all of them) further advised that they have heard the story before (and worse) and that a customer has every right to take the measures that I have taken to proactively pre-pay increases in my escrow would otherwise result in increases to my monthly payment. I was further advised that this is considered good money management and great budget planning. Well, yes this is my goal.
As for my diatribe, sir I re-state my position as follows: I mean no disrespect to you, but I chose this forum over others for one reason. I reviewed the communication between the forum members of this and several other forums. This forum reflected respectful communications between the members. Although I don't believe your response was intended in a malicious manner, the delivery was somewhat condescending.
I quiescently read this response several times prior to replying. I am the customer of BOA and was treated with a lack of respect, I therefore can create a diatribe about their actions and the potential ramifications especially in this economy. I like anyone else could be unemployed tomorrow. Minimizing monthly expenses is nothing other than financial planning. I also stated in my original post that the increase was slight or as you describe it miniscule, however as I also stated cumulatively these miniscule amounts have the potential for becoming significant.
As far as my taking the word "priviledge" out of context; respectfully, you did not partake in this colloquy and cannot in all honesty render such a conclusion.
I do thank you for taking the time to respond and do think you were trying to be helpful. I remain with not one but two legs to stand on.
Thank you for the welcome. Yes I'm aware that this is normal, since the analysis is performed annually in January prior to the lender receiving the annual HO renewal. I have always prepaid any increases up front and never had an issue with this lender. I was curious with everything going on these days on the Hill if RESPA may have been amended clearly prohibiting the customer from prepaying in a lump sum any increases to their annual escrow in order the keep their payments from increasing. I don't believe there has been such a change.
gmakerley
Respectfully I disagree with you, I was extremely angry with BOA to say the least over the verbiage used (priviledge) the very moment the BOA associate said it. At that particular moment I was not aware that BOA was receiving TARP funds. The associate's tone was disrespectful and her comments even shocked the branch associate, who I must admit could not apologize enough. I did feel empathy for the branch associate, she was clearly embarrassed.
As a reminder I stated that I have prepaid increases in the past on this very account without any problem. Furthermore if I as a customer don't have this so called "priviledge" then the online option to pay additional funds directly into my escrow account would not be offered.
I dont' believe I took this matter further than necessary. With all due respect to you the ice cream story, although entertaining appeared to be a momentary side track, yet is just another example of BOA's treatment of others. However, I do believe you were attempting to provide me with a long version explanation to support that you were not in any way acting as an apologist for BOA.
As far as my not having a leg to stand on, I mean no disrespect but I believe you to be entirely mistaken. The bank did finally apply my prepayment and reset my monthly payments back to the amount they were prior to the increase. Could it have been something I said such as closing every account I have with BOA be they assets or liabilities to a different financial institution?
Furthermore, considering the treatment that I received after having been a loyal customer for 20 plus years and having had several accounts with this bank, I decided to do a little shopping. To my amazement, when inquiring of other financial institutions (without mentioning who I bank with) about this situation and gathering material on their services; each and every financial institution I visited said "You must bank with BOA". The financial institutions (all of them) further advised that they have heard the story before (and worse) and that a customer has every right to take the measures that I have taken to proactively pre-pay increases in my escrow would otherwise result in increases to my monthly payment. I was further advised that this is considered good money management and great budget planning. Well, yes this is my goal.
As for my diatribe, sir I re-state my position as follows: I mean no disrespect to you, but I chose this forum over others for one reason. I reviewed the communication between the forum members of this and several other forums. This forum reflected respectful communications between the members. Although I don't believe your response was intended in a malicious manner, the delivery was somewhat condescending.
I quiescently read this response several times prior to replying. I am the customer of BOA and was treated with a lack of respect, I therefore can create a diatribe about their actions and the potential ramifications especially in this economy. I like anyone else could be unemployed tomorrow. Minimizing monthly expenses is nothing other than financial planning. I also stated in my original post that the increase was slight or as you describe it miniscule, however as I also stated cumulatively these miniscule amounts have the potential for becoming significant.
As far as my taking the word "priviledge" out of context; respectfully, you did not partake in this colloquy and cannot in all honesty render such a conclusion.
I do thank you for taking the time to respond and do think you were trying to be helpful. I remain with not one but two legs to stand on.
i suppose i took "privilege" out of your initial post and hadn't noted that the bofa person had given you that word. it did seem to me to be out of context. not having the background of the whole discussion, yes, i clearly could have taken it out of context myself. and yes, the ice cream story was only to demonstrate my lack of affiliation with bofa.
i understand better your entire point - no doubt i responded without sufficient knowledge.
i can't defend nor can i defame bofa for its handling of customer accounts. i've never had accounts with them.
i apologize for anything that i wrote that may have been construed as condescending. it was certainly not my intention to respond in that manner.
i understand better your entire point - no doubt i responded without sufficient knowledge.
i can't defend nor can i defame bofa for its handling of customer accounts. i've never had accounts with them.
i apologize for anything that i wrote that may have been construed as condescending. it was certainly not my intention to respond in that manner.
Okay, sure, this way that BOA is handling the process is a little backwards but instead of fighting them to change their behavior, wouldn't it be easier and less painless to change yours? Since this has already happened twice, can't you assume it will happen again if those escrows numbers go up of course. Couldn't you just stop torturing yourself by depositing that check in your checking acct, then transferring all back into your escrow acct first chance you get?
For example:
You get a refund check (and you will!) for $1500
You deposit that check for $1500 into your checking acct
You get your escrow review, saying you'll be short $1500 (approx)
You then transfer that money into escrow acct. Viola!! Or at least let that money sit in your acct all year, using it bit by bit for the shortfall.
Yes, this is annoying, but no one's losing money here.
By privilege, I'm sure the bank employee was suggesting 'you can do it if you want to' but the desired results aren't guaranteed. And that's just exactly what happened.
You asked 'its a privilege for me to pay them money to keep my payments within my budget?????' The answer is yes. They can legally take away the option for you to pay extra (beyond the legal reserve amount) at anytime. Also, if you just kept the check in your own acct, isn't that the same safeguard of keeping your payment within budget? It seems like you'd just rather THEY be responsible for holding onto your extra cushion and they don't feel like it. Hey, neither do you so what's your problem?
You may not like/agree/appreciate their behavior, however you're the one with the headache, so just change yours and feel better.
Done and done.
Not to mention, if you'd had a bigger down payment you could probably get a mortgage that didn't require an escrow acct at all, but since you, like the majority of us including myself couldn't come up with that much money, we have the PRIVILEGE of using the SAFEGUARD referred to as an escrow acct that both decreases the bank's risk in loaning you money in the first place. Remember, the escrow acct is a tool for managing mortgage payments and related costs, not a savings account or financial planning tool.
For example:
You get a refund check (and you will!) for $1500
You deposit that check for $1500 into your checking acct
You get your escrow review, saying you'll be short $1500 (approx)
You then transfer that money into escrow acct. Viola!! Or at least let that money sit in your acct all year, using it bit by bit for the shortfall.
Yes, this is annoying, but no one's losing money here.
By privilege, I'm sure the bank employee was suggesting 'you can do it if you want to' but the desired results aren't guaranteed. And that's just exactly what happened.
You asked 'its a privilege for me to pay them money to keep my payments within my budget?????' The answer is yes. They can legally take away the option for you to pay extra (beyond the legal reserve amount) at anytime. Also, if you just kept the check in your own acct, isn't that the same safeguard of keeping your payment within budget? It seems like you'd just rather THEY be responsible for holding onto your extra cushion and they don't feel like it. Hey, neither do you so what's your problem?
You may not like/agree/appreciate their behavior, however you're the one with the headache, so just change yours and feel better.
Done and done.
Not to mention, if you'd had a bigger down payment you could probably get a mortgage that didn't require an escrow acct at all, but since you, like the majority of us including myself couldn't come up with that much money, we have the PRIVILEGE of using the SAFEGUARD referred to as an escrow acct that both decreases the bank's risk in loaning you money in the first place. Remember, the escrow acct is a tool for managing mortgage payments and related costs, not a savings account or financial planning tool.
(Sorry for the duplicate post)
And lastly, if you held onto the money yourself you could probably stick it in an interest baring acct and actually have a REAL overage at the end of the year.
And lastly, if you held onto the money yourself you could probably stick it in an interest baring acct and actually have a REAL overage at the end of the year.
A reasonable suggestion, methinks.