I realized my lender used $5,100 in escrow funds to pay someone else’s taxes – 20 years ago. What should I do now?
When you take out a mortgage, your lender wants to make sure you have enough money to pay your homeowner’s insurance and property taxes. One way is to set up an escrow account with just enough money to cover these fees.
But what if your mortgage lender doesn’t use the money expected? If 20 years after opening the mortgage, you find that it took $5,100 out of the escrow account and accidentally paid another homeowner’s property taxes.
Hypothetically, what can you do to rectify the situation and hopefully get your money back?
You have borrower rights and do not allow the lender to use the money in your escrow account for anything other than to enter into an agreement.
According to the Federal Reserve, the Real Estate Settlement Procedures Act (RESPA) requires lenders to provide an itemized list of charges for funding and monies once paid by the servicer.
If you find that your mortgage company used these funds in your escrow account, it’s a good idea to contact your local tax agency and see what their records show. Your paperwork is your first priority because you will need documentation to prove your case.
Then contact your mortgage lender to find out what happens at the end of it. The New York State Department of Financial Services said formal complaints are first made in writing.
In most cases, lenders will respond within 20 business days and resolve the issue within 60 business days. At that point, it will either correct the problem – in which case the $5,100 payment will be returned to your account – or provide a statement covering why it denied your complaint or request.
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If you don’t get the response you were hoping for, you can escalate the issue and file a complaint online with the Consumer Financial Protection Bureau (CFPB).
Just like the complaint you submit to your lender, you need to provide as many details as possible. The CFPB requires that you be clear and include any important dates and amounts the mortgage lender obtained from you. Don’t forget to include your contact information and the name of your mortgage lender.
