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Can my mortgage company change the month they collect my school or county tax for my escrow account anytime they wish?

Buffalo, NY |

HSBC mortgage recently told me a new company is handling my escrow account and i received the analysis from them and there is a shortage I disagree with. The yearly county tax has always been paid by my town in January and the estimate by the mortgage company is in February. Well the company now says it wants to move the estimate up a month to January which now has created a shortage in the required reserve of $350. I feel i do not have to pay this because the shortage was created by them by estimating my loans escrow at 11 months and not the 12 months like usual.At 12 months the reserve would be fine.Is this a violation of the parameters of the loan some how? To me this gives them the freedom to create a shortage anytime they want to get money from people.Call the NYS banking authority?

Attorney Answers 2


Consult with an attorney who will review your loan documents in order to review/analyze any possible modification language.

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The money to pay the property taxes are held in escrow and is not to be touched by the bank except for that purpose so they have no incentive to keep changing it.. They do, however, need to have enough money in your escrow account to pay the taxes when they become due. If the taxes are due by 1/31 each year, paying it in February will mean paying it late and incurring a late fee so that makes no sense either. Sounds like whoever did the initial estimate (February payment) was wrong and they are now adjusting to ensure that it is paid on time (January). You do need to pay it because they are using the money to pay your taxes on time. They only "created" the shortage in the sense that they are collecting the extra month now instead of at closing so either way you'd be paying it.

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