Escrow Miscalculation - What are my options?

[coboltnet]

I am in FL. We are current on our mortgage payments and have never been late. This is a time-sensitive issue...

My mortgage was recently taken over by a new company, Green Tree Servicing, which has made an error on their 2012 Escrow miscalculation (two "Estimated" entries for PMI were subtracted from the escrow amount on their form, but were not valid). They are now stating that I owe an additional $25/month payment through 2012 for the "shortage."

I have contacted them (3/6, 3/15 & 3/19) and though they stated on 3/6/12 that the escrow review would be completed in 10 business days, as of today this has not occurred. Apparently, they "did not enter the request correctly." According to the supervisor it is now 'escalated', to be completed by 3/23/12. I am supposed to receive this in the mail and the details will be available online, however even if this timing is followed the supervisor stated that it would not be effective until 5/1/12.

The online details clearly show that I have the correct amount in my escrow balance, which actually is $60 more than needed, but I have been told that I will be required to pay the miscalculated shortage in my 4/1/12 payment to avoid penalty. This will, of course, increase the amount they owe me to $85.

I am concerned that this issue will not be resolved any time soon (GT Servicing has a terrible track record, based on online reports) and that my overpayments from the "shortage" miscalculation will not be refunded.

What actions can I take to force GT Servicing to correct my payment immediately and to refund the overage amount that they clearly owe? As stated, I expect that they are going to drag this out, while continuing to require us to pay extra every month.

Thanks in advance for any advice on how to proceed with resolving this issue.

 

[HUD-1]

The RESPA policy is that if the surplus is $50 or more at the time of the escrow analysis, they have to send you a check within 30 days.

 

[coboltnet]

Thank you for the RESPA detail.

The error was made to show that I owed the escrow nearly $300. They had entered two "Estimated" lines on their calculation form, which was subtracted from the total balance, then they based their future calculations off of this lower number. They showed that I owed a 'shortage' and it's now been added to my April 2012 mortgage payment. Overall, my escrow actually went down so I should be paying less per month for my mortgage. With this 'shortage' I'm actually paying more than last year!

Until they do a recalculation with 'actual' numbers the difference that should be in my favor is being ignored. Since my phone requests are also being ignored it looks like I will have to start the RESPA communication process (Section 6) which gives them 60 days to resolve the issue or explain why not.

Once I speak to them again on Friday, if the escrow review isn't completed, I'll have a list of communication to include in my RESPA letter, including false/contrary information that was provided to me by the different CS operators and supervisors I've spoken with.

 

[coboltnet]

Something is still fishy...

Finally, after discussing the escrow calculations the Green Tree supervisor came back with a lower escrow amount, but they are still showing a shortage. Essentially, they only removed one of the two 'estimated' entries. This was justified by stating that my original PMI had been paid in arrears and that they made one 'extra' payment to make the PMI payments paid as 'current' to the insurer.

I've done a little digging around and can't find anything specifically stating that this is valid/invalid, but it doesn't seem like this can be done at all! Traditional mortgages are all paid in arrears, since the interest is paid that way, so PMI into escrow is calculated for this also. I'm pulling my mortgage contract to check, but I don't think I can be asked to change how my escrow is structured at all. GTServicing seems to think otherwise.

New question: Is it legal for the mortgage holder to restructure your escrow payment in this manner?

Thanks for your responses!

 

[coboltnet]

Closing & starting a new thread

I guess I'm not going to get a response to my newest question. Closing this thread & starting a new one.
Thanks...

 

[coboltnet]

PMI Payment - Can Mtg Servicer change from Arrears to Actual?

Reposted from a separate, incorrectly started thread.

I am in FL.

I've recently attempted to resolve a calculation error made by Green Tree Servicing when they performed my escrow review.

Initially, they subtracted two "estimated" PMI payments then claimed I owed a shortage for the 2012 escrow. After multiple calls, during which they admitted the error, they performed a second escrow review. This time, they are stating that one of the two 'additional' PMI subtractions was valid because the PMI had been paid in arrears by BoA before they received the loan transfer and that their policy was to pay PMI as 'actual'. They still show that I owe the 'shortage' but it's much less.

Is it legal for them to make this change? I've seen that interest is always paid in arrears (i.e. February 2012 payment goes to the January 2012 interest) but I can't find any specific details about how PMI should be paid. In addition, other than the calculations in the escrow review I received no notice from GreenTree Servicing that this change would be made.

Thanks for any information or assistance.

 

[tranquility]

Sorry to be so difficult, but you will get the best answers from those who know the most facts.

Here, the new servicer cannot have rules which violate your escrow contract. The way to calculate payments is going to be listed there. Not only do most such contracts allow for pre-and not post-payments, but also allow for a reserve to take care of issues which reasonably develop. While there are clearly RESPA requirements, the accounting portions are more difficult to understand than taxes.

The problem for you is, you have to be right if you challenge them in court. There is assuredly a loser pays clause in your escrow contract and they have a lot more to lose if they have to change the way they calculate escrow reserves then you have to gain, so they will either quickly agree with you or fight you to the death.