Monday, June 25, 2007
Help Me Howard: Escrow
If you own a house or a condo, you probably have a mortgage, and, for many people, you also have an escrow account, which the bank manages and then pays your insurance and property taxes when it's due. But, guess what? Sometimes they forget, and then the escrow trouble starts. What can a homeowner do? Let's bring in Help me Howard with Patrick Fraser for the answer.
WSVN -- If you own a house, if you own a condo, odds are you have a mortgage. And if you have a mortgage, odds are you have an escrow account.
Howard Finkelstein: "An escrow account lets you pay a portion of your property taxes and insurance each month to the lender, instead of having to pay a lump sum at the end of the year. Then the lender pays the insurance and taxes for you."
Luis Suarez: "A stove, an oven, yes, Argentina, barbecue, everything, got it all."
And when Luis Suarez bought his home, with a do-it-all kitchen out back, he liked the idea of an escrow account.
Luis Suarez: "Make everything simple and easy for them and for me."
For four years, Luis wrote a check each month to cover his mortgage, insurance and property taxes. Then, in March, he got a letter from a company offering to help him save his house.
Luis Suarez: "I would have lost my house, I would be on the street."
Luis thought it was a mistake, but, to be sure, he called the company out of curiosity.
Luis Suarez: "I didn't pay my taxes for 2005 and 2006."
Luis was still suspicious, so he went to the Miami-Dade Property Appraiser's web page, checked his address and discovered his property taxes had not been paid.
Luis Suarez: "And that should not be possible."
When he called his bank, their first reaction was not pleasant.
Luis Suarez: "They tried to blame everything on me."
When Luis persisted, he says they realized their mistake and paid his taxes back but then they stunned him again.
Luis Suarez: "Telling me that I owed them an amount of $10,000."
Luis says, over the past couple of years, his bank told him he had overpaid his escrow account by over $3,000 and had refunded that money to him, but he says they still had the rest of the money.
Luis Suarez: "Yeah, you are right, they are missing like six- to $7,000."
And when Luis asked the bank to replace the money he says they lost, they hesitated.
Luis Suarez: "They told me I had to wait because they had re-opened another investigation on the investigation they already had open for my taxes."
While they try to find out where that money from the escrow account went, they sent Luis a letter telling him to send them a check for the property taxes he thought he had already paid.
Luis Suarez: "They want me to make one payment of $10,000."
As the battle with the bank has dragged on for months, it's left Luis frustrated and fuming.
Luis Suarez: "And it became a nightmare for me and my family."
Unable to get his escrow account corrected quickly, he dialed Help me Howard.
Howard Finkelstein: "A lender has a right to require you to have an escrow account, but if they force you to have one and if they fail to pay your taxes or insurance, they are responsible for any interest fines or penalties that you incur."
After we contacted the bank, it took a few days, but they finally uncovered the problem. They told me they had the wrong parcel number for Luis' property. Luis says they had paid someone else's taxes with his money. They agreed to pay the interest and penalties that Luis had incurred, and determined what Luis believed they owed him, $6,000, they agreed to pay that as well. Luis told me he doubts he would have ever received the $6,000 back if Help me Howard had not become involved. He is relieved and vowed his escrow account is a thing of the past.
Luis Suarez: "For now I won't recommend for anyone to pay escrow. I recommend everyone to take care of their own escrow payments."
Patrick Fraser: "Of course mortgage companies demand some people to have escrow accounts. If you have one, once a year they have to send you a statement detailing where your money was spent. Make sure you read it and check with your insurance company and the property appraiser's web pages to confirm the lender paid the money they were supposed to pay."
Paying and paying for a problem you can't unload? Don't mortgage your future. Loan the headache to us. Our interest is with your interest.
FOR MORE INFORMATION:
Broward Property Appraiser
Miami-Dade Property Appraiser
Monroe Property Appraiser
Palm Beach Property Appraiser