I mortgage recently went up $200. When we called the mortgage company they said the entire year we had been paying $200 less than we should be paying?

Asked by Weloveourkrg, 95206 Mon Mar 15, 2010

I mortgage recently went up $200. When we called the mortgage company they said the entire year we had been paying $200 less than we should be paying into our escrow account. They said for the next yr our payment is going to be an extra $200 a month and after that it was always be $100 extra a month.when we signed our house payment if we would have known the payment was going to be $100 more than we agreed we would have looked for a different house. we are on a budget and that really throws us off. is this legal? are they allowed to do this to us?

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8
Randy Elliott, Agent, Lodi, CA
Tue Mar 16, 2010
Great detailed answer Kathryn! I even gave you a 'Thumbs Up' myself. :-)
1 vote
Kathryn Vats…, Mortgage Broker Or Lender, Stockton, CA
Tue Mar 16, 2010
Hi there, Is it legal? Yes, to the lender of course. If you loan office was at the signing they could/would/should have let you know about a couple of things. 1) Your impound/escrow account will be analysed every year, if you have a shortage in this account the lender will let you know and you have (2) options: Put the extra money needed into the account or allow for an increase in your payment. 2) After escrow analysis there may have been to much money, the lender would have sent to you an escrow analysis report with a check. Since I do attend all of my signings, I have the opportunity to explain to the buyer to send the check back! Otherwise the next year you will be short. the other items the escrow officer needs to tell you is that you may be receiving a supplemental property tax bill, as the present tax assessment is based on the previous owner's tax base. I alway let the buyer know that this will be coming, to prepare for this and not to be suprised by this. the tough part is, we don't really know when you are going to get it. San Joaquin County is about a year behind in their assessments so it could be a while. The other thing we don't know is how much it will be. Very frustrating indeed! I can certainly understand your issue with this and the increase in the payment. I would suggest looking into another service provider for you homeowners insurance to see if you can get a lower annual premium which will decrease your payment, and I would check with the tax assessors office to see if you can get an adjusmtne in your value, there by reducing your property taxes. Hope this helps. Kathryn
1 vote
Weloveourkrg, Home Buyer, 95206
Thu Mar 18, 2010
thank you all very much for your answers. I understand the fact that we had an escrow account that we were putting money into every month. i believe it was about $200. The problem we have is the mortgage company is saying we should have been putting $300 in every month. They said that they noticed we were short since the first month we paid, but they only send out paper work about it once a year. why would they wait a whole year to tell us? it jsut doesnt make sense.
They paper said our escrow account was short $1200 (or so) and we had to pay that.
So, since we should have been putting $300 into our escrow account every month for the next year they said we are going to have to put the extra $200 and then we will be caught up on what we hadnt paid, and then the following year out payment will be raised $100 and stay that way. I dont see how we can sign for one amount and them just change it on us.
0 votes
Kathryn Vats…, Mortgage Broker Or Lender, Stockton, CA
Tue Mar 16, 2010
Please forgive me for the spelling errors! Yikes....
0 votes
Randy Elliott, Agent, Lodi, CA
Mon Mar 15, 2010
Hey KRG Lovers,

Is it legal? Yes. Is it possible that when you signed your title papers this was just breezed over and not explained to you thoroughly? Most likely.

Was your real estate agent present when you signed? Was your lender present as well?

In 5 years I've attended every signing but two just for the reason you're here about. I want my clients to understand exactly what they're signing and be there for any questions

In 5 years I've only seen one lender ever show up for a doc signing.

It seems that your escrow account has had some changes since you purchased your home. Go back over your original documents when you signed them and see if you can find anything explaining any future changes. Also, as Rocky said, you may want to speak to a real estate atty for specific 'legal' issues surrounding your situation.

Good luck!
0 votes
Rocky G.H. H…, Agent, Ripon, CA
Mon Mar 15, 2010
You may want to closely examine your loan agreement (s). There may have been a special program or it may have been a mistake. Typically, if you signed and agreed to a certain payment, interest and term, it is your responsibility to keep up your end of the bargain. Many hybrid type loans have these "resets" and these were very popular a few years back.

As mentioned, closely examine the loan papers. You also may want to seek a Real Estate Attorneys advice.

Best regards,

“Rocky” G.H. Hawrysz
Realtor®, Broker Associate, CRS®, e-PRO®, ABR®, SRES®
Prudential California Realty
P: (209) 444-6610
Lic: 01468373
Web Reference:  http://www.teamhawrysz.com
0 votes
Julie Rice T…, , San Mateo, CA
Mon Mar 15, 2010
It does not seem as if your mortge payment has increased. It seems as if your monthly payment issues surround the fact that you have an excrow account. Property taxes increase annually, typically by 2% a year. And it is very possible that the original amount set up to be collected to cover your property taxes and homeowner's insurance was under estimated.

Assuming you did not buy with an FHA loan, it might be possible for you to get rid of your taxes and homeowner's insurance impound account. Then you could manage those two bills on your own. YOu can also contact your loan agent...maybe a refi is possible and might help you offset that escrow account increase.

Good luck!
Julie Thall
jthall@lmglending.com
0 votes
Fred Glick, Agent, Mountain View, CA
Mon Mar 15, 2010
Sorry this happened but if the Seller or the real estate agent had knowledge of this, you may have an action against them.

Also, if the mortgage broker knew this would happen, they may be at fault for not letting you know AND qualifying you based on what the payment could be. Although this is not required, it should have been done in good conscious.

As for the mortgage company, they are just a conduit of getting the tax bill and paying it. They've actually laid money out on your behalf, so they are correct.
Web Reference:  http://fglick.com
0 votes
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