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BAC pd my property tax - although it's current, not escrowed, and they were not authorized to do so

Discussion in 'Bank of America Mortgage Help' started by capote203, Dec 1, 2010.

  1. capote203

    capote203 LoanSafe Member

    Oct1/10 my FF serviced mortgage was transferred to BAC.

    I have been working on getting my loan modified, and a couple wks ago was asked by my negotiator if I was okay with having my property tax escrowed as part of my modification. Last we spoke, my file was with the escrow dept, who were figuring out what my monthly impound amount would be, should my loan be modified. I was told this would take 3-5 days.

    Yesterday, I went on my account online, and saw that a week ago BAC pd my property tax, which is due Dec10th.

    Today, my negotiator called me, unaware BAC pd my property tax, and told me they are unable to add an impound to my account. He had no idea BAC pd my taxes.

    So - I have no impound account, my property taxes were current - and BAC took it upon themselves to pay my property tax unauthorized and before it was due.

    Does anyone know if this is legal?
  2. TomEason

    TomEason LoanSafe Guide Staff Member

    Yes, the right of the beneficiary to start an escrow account is provided for in every mortgage note I've ever seen. You can refer to your own note to be sure. In any event, if you're working on a HAMP mod, the HAMP regs require an escrow account be established.
  3. capote203

    capote203 LoanSafe Member

    I am working on an in-house, my first is above the limit for HAMP. My recollection of my mortgage documents is that it stated I chose not to set up an escrow account, and would be paying my property tax, insurance directly.
    I'll have to dig out the documents. My understanding is that if the property taxes are in arrears then the servicer can take it upon themselves to pay but not while current. Although I could be wrong.
  4. TomEason

    TomEason LoanSafe Guide Staff Member

    Yeah, dig out your note - I could be wrong too. Whatever the note provides for, it wouldn't surprise me at all if the loan servicer is doing whatever it wants to do regardless!
  5. chowder

    chowder LoanSafe Member

    Yep. BoA requires that escrow. They get to juice you a little extra that way. They told me my HOA dues would have to be added as well.
  6. underwatertoo

    underwatertoo LoanSafe Member

    BofA added 16.6% extra when they established the escrow account on my mortgage. I have to pay into this escrow account monthly and get no interest from them. After receiving the in-house modification, I called the Escow and Property Tax department to request they close my escrow account and they said "since I am in review for HAMP, I need to have the escrow account". Surprise news to me! So, my account is still in review for HAMP even though they told me "my investor did not participate in HAMP". I'm waiting to see what will happen. My file is "with the underwriter". If it gets approved for HAMP this would mean I was lied to back in June (no surprise), then perhaps they will make it retoactive and return some of the interested charged.

    BofA paid my property tax along with the entire year's homeowner insurance before the impound account was setup. I was paying my homeowner insurance on a month to month basis and all of a sudden, the insurance company refunded my payment because it was paid up for the entire year. That's how I found out BofA was paying for me. Once the escrow account is setup your mortgage payment will go up.

    So, there I was, asking BofA for HAMP because I was having a hard time making my monthly payments and what I got was a new monthly payment that was 50% higher than my old payment that I was now required to pay!!!!
  7. capote203

    capote203 LoanSafe Member

    The strange thing is that the negotiator told me "my request" for an impound account had been denied, and that they were keeping it the way it was with me paying property tax and insurance directly. I hadn't requested an impound account. The negotiator had asked me if I would be okay having my property taxes escrowed as part of a modification.

    I'm thinking that them denying setting up an escrow acct may be a bad sign, but then they paid my property tax... very confused!
  8. chowder

    chowder LoanSafe Member

    Ultimately they would be the ones paying tax/insurance/HOA dues etc etc.
    If your in default, it's not surprising at all they'd pay this stuff regardless of what they tell you.
  9. capote203

    capote203 LoanSafe Member

    Keeping in mind my property taxes were not delinquent, and I pay them directly, not through escrow -

    On Dec 4th I received a notice From BAC Tax Services Corporation dated Nov23/10. The notice states -

    "BAC Tax Services, at the request of BAC Home Loan Servicing, has completed a property tax review of your property. BAC Home Loan Servicing has learned that there are delinquencies associated with your property. As a result, it has advanced funds to pay the delinquencies owing..."

    It further states -

    "Your Security Instrument provides that:
    1. If an escrow account does not exist for the payment of taxes, insurance, assessments, fines and impositions related to the property, the borrower shall pay such items before they become delinquent directly to the party to whom payment is due.
    2. If the borrower fails to timely pay such items, the lender has the option to advance funds to pay them. ..."

    LA County property taxes are considered delinquent if not postmarked by Dec10 - so, as of today, my property tax would still not be delinquent, had BAC not paid them.

    My feeling is I do not need to reimburse BAC this amount, as they had no right to pay them in the first place.

    Thoughts?
  10. TomEason

    TomEason LoanSafe Guide Staff Member

    All mortgages contain the language (or similar) to that which you just quoted. It means that BAC does have the right to pay the delinquent taxes, and add it to the amount you owe, and/or establish an escrow account for the past and future payments.
  11. capote203

    capote203 LoanSafe Member

    The taxes weren't delinquent.
  12. TomEason

    TomEason LoanSafe Guide Staff Member

    Forgive my misunderstanding. I read the quote from BAC that alleged your taxes were delinquent. If BAC is mistaken about that, then I might recommend you write a letter to the BAC Tax Services Corp disputing their allegation and asking them "what gives."
  13. chowder

    chowder LoanSafe Member

    Ah! A lot of this going on down that way. One guy I know had funds transfered from his BoA checking account, to an escrow set up by BoA, then paid prop tax on an apartment unit he owns. It was a substantial sum. The county refunded, and he got the escrow terminated. Guess which took longer...................

    That's right. Getting BoA to terminate the escrow.
  14. capote203

    capote203 LoanSafe Member

    Tomeanson - I am definitely writing them the "what gives' letter. What I need to find out is, legally, am I required to pay them back for the taxes they paid on my behalf, as, contractually, under the circumstances, they did not have the right to pay them.
  15. capote203

    capote203 LoanSafe Member

    So he was current, and BOA in effect double paid the prop tax? Did BOA transfer the funds from his checking account without his authorization? If so, that's pretty scary.
  16. freedomwon

    freedomwon LoanSafe Member

    Capote203 -

    If your mortgage is in default status, property taxes falls under the heading of (Default related fees & services). There’s a whole list of things the servicer can charge you for. Whether you had an escrow account or not, the servicer is simply protecting the note holders interest in the property.

    The tax assessor will apply payments to your account in the order in which they are received. And frankly, they don’t care where the money comes from so long as the taxes are paid.
  17. TomEason

    TomEason LoanSafe Guide Staff Member

    I don't know the answer, but don't pay property tax since BAC already did! In the meantime, write that letter and see what they say.
  18. chowder

    chowder LoanSafe Member

    Affirmative. He had been talking mod to them, but was not in a trial, or had an agreement of any kind presented by them.
  19. capote203

    capote203 LoanSafe Member

    Wow - is that legal? I have 5 bank accts at BOA... Sounds like time to close them out.
  20. capote203

    capote203 LoanSafe Member

    did he auto-pay his mortgage from his bank acct? Or had he ever done a direct debit phone payment? Was they a point in time where he had authorized them access to his bank acct?

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