Loan Payment increase!!!

Synno · Joined: 21 Feb 2010 Posts: 2

I bought a house last year Feb. 2009, gave 20% down payment. it was fixer-upper. Signed a contract with payments at $649.00 tax and insurance included. I paid that for a year and now out of the blue I get the nuew booklet in the mail and they raised my payments to $880.00 called the bankedd and they told me it was due to the escrow analysis, they messed up on that. Is there anything that I can do. I got my loan throught BofA and in Nov 2009 they transferred my load to BAC. any help from you guys would be appreciated.

m2c · Joined: 03 Aug 2005 Posts: 937

Your credulity is a bit stretched with your statement of the sole explanation of “messed up” but I’ll go with full “suspension of disbelief”. Your situation is highly unusual as to the amount involved but you will routinely have your escrow account analyzed each year to adjust for changes in escrow disbursement amounts. The ultimate explanation will come from BAC but here are some of the things to look for.

Look at the “aggregate analysis” form would have accompanied your new payment book. Sometimes (not often - very infrequently would be a better term) there is an obvious error – e.g., annual taxes shown as a half tax, premium for a 36/1 insurance policy coded as a 36/3. Compare with a mortgage history covering your time with BofA as well as BAC. Was the correct amount of escrow transferred? Was the last half real estate tax paid both by BofA (prior to transfer) and BAC (post transfer)? Compare with the aggregate analysis done at loan closing. Was any cushion used on the initial analysis? BAC could have gone to the allowable 2-month cushion after transfer. Did the seller have a homestead or agricultural real estate tax exemption which expired with your purchase? This would have substantially increased the monthly tax collection rate. All these are far out possibilities you payment increase is so “far out” that I’m surprised the BAC employee with whom you spoke didn’t go farther than a cursory review.

Determine how much of the increase is “temporary” to recover any shortage detected. You can’t do anything about collection RATES but there is some negotiating room in the shortage recapture. Look for a box labeled “shortage”. This is the amount which is recovered over typically a 12-month period and offers you best avenue for “relief”. Most servicers will stretch over a 24-month or even a 36-month period if there was some error in the original calculation.

Synno · Joined: 21 Feb 2010 Posts: 2

well after being on the phone for over two hrs. my phones being routed and re-reouted I got an answer, although I am not happy about it. I was wondering if there is anything I can do.

What they told me was when I first signed the papers, someone made an error on estimating my taxes, I was paying 50 bucks short of what the taxes were an also there was a tax increase which they did not average in. So in turn I am behind on my escrow, I have to get caught up AND theere tax increase. I dont know if I am making any sense, it doesnt make sense to me. So the reason why my payment went up was due to someones F UP!!!

Thank you.

m2c · Joined: 03 Aug 2005 Posts: 937

You’re making perfect sense except for the “took two hours” – well, a black mark for BAC! A $50 (per month?) error is a biggie.

Viewed one way – you owe the money and were paying less so now the Iceman Cometh. Viewed another way, it’s a hell of a jolt and you thought from the beginning, the house was going to cost you less even before any of the escrow disbursement items increased. I’d do two things:
1. Review your closing statement (HUD 1) and sales agreement. If there was to be tax proration, you may have been shorted a credit at closing. You may need to speak with title company
2. Find a reasonable person at BAC and say, “hey, this was a screw up I had nothing to do with; how about spreading the shortage amount (look for this figure on your aggregate analysis form) over three years?” May have to settle for two years but I can’t see a servicing MANAGER not doing this. Make sure you get beyond the flunkie level.

You may also want to report this to your local Realtor Board if the property was presented to you with wildly incorrect tax amounts. You could mention Homeowners Protection Act of 1998 to BAC in passing but I think they’re just trying to make the best of a bad situation, not violating the law. Can’t believe they wouldn’t be open to spreading the shortage over a longer period of time but you’ll still have to bear the higher per month base rate.

TimtheMortgageGuy · Joined: 16 Jan 2008 Posts: 96 Location: Rosemount, MN

Synno wrote: I bought a house last year Feb. 2009, gave 20% down payment. it was fixer-upper. Signed a contract with payments at $649.00 tax and insurance included. I paid that for a year and now out of the blue I get the nuew booklet in the mail and they raised my payments to $880.00 called the bankedd and they told me it was due to the escrow analysis, they messed up on that. Is there anything that I can do. I got my loan throught BofA and in Nov 2009 they transferred my load to BAC. any help from you guys would be appreciated.

FYI-you signed a contract for your principal and interest payment, not your escrow amount. Since taxes and insurance will vary, so will your payment. Since you put 20% you did not have to escrow and it sounds like you personally would have been better off this way.

TimtheMortgageGuy · Joined: 16 Jan 2008 Posts: 96 Location: Rosemount, MN

Synno wrote: well after being on the phone for over two hrs. my phones being routed and re-reouted I got an answer, although I am not happy about it. I was wondering if there is anything I can do.

What they told me was when I first signed the papers, someone made an error on estimating my taxes, I was paying 50 bucks short of what the taxes were an also there was a tax increase which they did not average in. So in turn I am behind on my escrow, I have to get caught up AND theere tax increase. I dont know if I am making any sense, it doesnt make sense to me. So the reason why my payment went up was due to someones F UP!!!

Thank you.

Not necessarily someone's "Fup" either. Sometimes the lender does not have access to a tax increase that is in the works. I.E. at the time of closing they only had access to last year's tax bill, which could have been quite a bit different than the latest tax bill. You probably have an option of making a one time escrow catch up payment and then your monthly payment would not go up as much.

Bottom line is it doesn't sound like you are being screwed by the lender or anything. Taxes and insurance are what they are and have to be paid.