Mad about it!

[alarosalpn]

I recently was approved for a loan modification. Everything was great. I just sent my first payment out last Saturday-no problem.
Well, last Friday I get a notice saying that my escrow account is negative and that they are going to take the amount owed and spread it out 12 months. That brings my monthly payment up more than $200!!!
So, I call the mortgage company and ask them why the escrow is behind, where did the money go from my loan modification because I pay escrow every month and the amount of the loan mod was including escrow monies... I went through 3 different people! The loan mod dept told me that the only way escrow money would be paid is if I was always an escrow account. I told him I HAVE BEEN since the day I bought my house! He told me to hold on so he could check something and then it started to ring and he sent me to loss lidigation dept. I had to go back and forth with her to get her to understand what was going on because she kept wanting to send me back to customer service! Ugh. Finally she looked something up and then told me to call back on Monday to follow up-she was sending it to be researched.
I call back Monday and was told there was no note yet and to call back today... Ugh.
I'll be so mad. If they don't fix this I'm gonna have to increase the amount that goes into my savings (that's where I pay my mortgage out of so its not inmy checking and I'm not tempted to spend it) another $100 a week! I'll have a really hard time paying everything else!
I'm so mad! this should have never happened!

[Spirit Deer]

I hope you can get it straightened out soon. Nothing is more aggravating than trying to talk sense to people who can't seem to do simple math.

We keep hearing about this crap and it's why we want to leave well enough alone, even though we could most likely get a lower interest rate if we re-fi'ed. I looked into it last year and they told us WE had told them our income was in excess of $20K per month. I wish. So I talked to them some more and she kept insisting she had been told by us that was our monthly income. I kept asking why we would make up a whopper of a lie like that when there would be no documentation to back it up, but all she'd say was that we had told her that amount. Finally, she got someone else into the conversation and it became clear from talking to the two of them the dumb fools had added an amount we receive annually to our monthly income, in its entirety instead of dividing it by twelve. Sheesh. Neither one of them could get it through their heads that was a payment of thousands of dollars that came in only once per year, not once per month. They even had our tax returns with the forms showing the annual payment, and STILL couldn't seem to grasp it. I finally gave up and told them if we made the kind of money they kept insisting we had told them we made, we wouldn't need their stupid re-fi in the first place. We haven't re-visited the idea since then, and with all the chaos in the mortgage industry now, we're not inclined to make any changes unless we have to.

They did recently change our house payment due date from mid-month to beginning of the month without notifying us, but that was corrected with a phone call and luckily we had the money in our checking to cover it, since it's on auto-pay. It seems like they're messing with everything these days. It's like since they're all confused and unhappy, they're going to make sure the rest of us are, too.

[alarosalpn]

Well, I talked with them again this morning and they said that the amount I owed at the time of the modification was paid but during that time they paid taxes and house insurance again... now I owe that money back to them.. sigh.
So now, my mortgage payment is $1640.99 a month for the next 12 months! I did some crunching of numbers and I will be able to pay it but money will be alot tighter for the next 2 months. After that my gas and lights will be caught up.
I'm just so mad! I take 5 steps forward and 10 steps back! and I dont even have to try!
Guess it's time to REDO my budget..

[rowdy35]

that really sucks for you !! What a nightmare. Countrywide did the same thing to me on my inherited rental property which I cannot sell, it's in Lake Tahoe and the market there is really in the toilet.

I am so sorry this is happening to you. I guess just try and not get too discouraged and see if you can either increase income or decrease your expenses.

hang in there !!!

[Spirit Deer]

We escrow our taxes and insurance too. We've never had our payments go up because of it. I don't understand why yours would be. If the annual payment was made for those items, and they're just now telling you it's going to be another $200 for the next year, that seems like they never added that monthly amount to your payments when you re-fi'ed. If that's the case, those payments aren't going to be just for 12 months, they'll be for the life of the loan. Otherwise, where will the money come from to pay taxes and insurance year after next?

I'm confused.

[TexasPeanut]

In the case of my own home loan, ours works like this, if our taxes and or insurance premiums go up, then there may not be enough money to cover it from the escrow so there is a shortage....which then the lender gives us the option of paying the shortage amount in full or dispersing it over the next twelve months with our house payments (making it bigger). We always pay in full since it's never too much that it is short if any, sometimes taxes have gone down so we have a surplus in escrow that must get refunded to us.

From that point on until the next year they must adjust your payment if there was a shortage so there will not be one again (even if you paid the shortage in full your payment will adjust for the cost increase of the tax, ins, so you will not come up short the next year)....at least until the new tax and insurance info comes in the next year. It's like you are doing it a year in advance. So they are showing you had a shortage of the entire amount when you refinanced to the new loan and the mortgage company paid out your tax and insurance payments and have adjusted your monthly payment to pay it back plus make sure you are not short next time.

**** FYI remember usually you can always pay the shortage amount in full and keep your payments as they were if you have the money to do so****

I would however be questioning them as to why your taxes and insurance were paid out at the time of the modification and then paid out again, causing you to have a shortage. Unless it's required to be upfront and kinda of like having to pay "last and first months rent" I don't understand why they would pay it twice. That shouldn't have happened. But if you were short it's common practice to adjust your payments to include the shortage amount plus so it doesn't happen again.

[scottp999]

When I worked in the default operations area at a large mortgage company, they would let us spread the escorw shortage over 24 months for people that were having trouble. You might want to ask a manager if they could approve that type of arrangement. Also ask for a full payment history for the last couple of years, so you can clearly see what happened to the escrow balance over time. Sometimes the mortgage company screws up the tax payments. Overpayments, underpayments, no payments, refunds credited to wrong accounts, etc.

An escrow shortage amount added to your payment (If it is valid) is really a 0% interest loan for 12 months. They are supposed to adjust the monthly amount up for your regular escrow payment to cover if the yearly taxes/insurance went up.