Over paid in escrow and bank wont release the money because the loan is late

[rollnthunder]

I over paid into my escrow last year by about $1300 and im in doing a repayment plan with my mortgage holder to get it caught up.I recieved a letter stating that i over paid and they wont release the money untill the mortgage is brought current.I asked them to take the money that they have in escrow along with my payment for the month and they wont release the escrow money.They claimed there is some federal law.Im wondering if they are playing games.If they would do this then i would be almost all caught up except for maybe $500 or so.Has anyone else had this come up.I talked to my 2nd mortgage holder today and asked them if this was them would they not release it they informed they would not hold they would apply it to the late payments.The bank that is giving me a hard time is Indymac federal.Thanks for any info.

[Moe Bedard]

Hi rollinthunder,


Welcome to the forum and thank you for joining...........


Complaints against a lender for violations of RESPA, if there is one, would need to be addressed with HUD................
here is the link to the info on escrow and RESPA........
HUD RESPA FAQs by Consumers about Escrow Accounts

[rollnthunder]

Thanks for the fast reply.I have been to the hud site a couple of times and did a little reading.I guess i will have to call them tomorrow and try and get a answer to this question.I dont feel its right for them to hang on to my money in escrow when im trying to get the mortgage caught up..They told me on the phone that once the mortgage is caught up they will then cut me a check and if i want to make a extra payment with it i can do so then....I told them that is the dumb....

[rollnthunder]

I contacted hud and they told me to call the michigan consumer american general or something like that and i did then they had me call FDC.When it was all said and done they told me to call my lender and tell them i had been in touch with them and there is no such federal law that they can hold my over paid escrow.So the bank played dumb and said they dont know why someone told me that but they are putting in the request to have the escrow thats over paid applied to my loan.

[Moe Bedard]

at least after all was said and done.........the situation looks like it may be resolved........

keep us posted.......

[rollnthunder]

Well to this date the bank has not released my escrow money.I have now filed a complaint with michigan attorney general.