Escrow analysis error resulting in a substantial shortage
I refinanced my mortgage in October 2016. Escrow of taxes and insurance were mandatory by financial institution. In August of 2017 I received a check from escrow for overage in escrow account. In January 2018 I was notified by Insurance Co that my insurances had been canceled for non payment by financial institution. After several phone calls and arguments with Insurance/escrow servicing co they paid for Homeowner, flood, and windstorm insurance. At no time did they disclose that there had been an error in their part when analyzing my escrow account in 2017. On August 31, 2018 I received a new Escrow Analysis increasing my mortgage payment from $1,123 to over $1,780.00 a month to cover escrow shortage of over $5,000.00. When I called the mortgage servicing department about the issue they did not explain the issue rather insisted that it was due and I had to pay the $5,000+ in full or in payments of over $430 a month. I contacted my original Loan Officer late this morning and explained the situation , He has since called me back and confirmed that I was correct about the error they had made and that they could assist by extending a 60 payment loan to pay the escrow shortage.
What are my rights in a situation like this? It was their error that created the shortage back in 2017. If they would have disclosed the error when I called them late last year I would not be in this predicament.
Thanks for checking out our site and posting on the forum. I’m sorry to hear that you’re going through such a stressful situation with the escrow error. I would recommend reading over all of your documents from the settlement and seeing if there’s a clause for what happens if an error is made. Unfortunately, we can’t give legal advice, and I do recommend speaking to a local real estate attorney to see if anything can be done since the error wasn’t your fault. I hope the situation gets resolved.
All the best,