My salesman gave an "estimate" on our tax inclusive mortgage. I insisted that I did not want my entire payment (tax and insurance included) to exceed $400.00 A MONTH, as I knew that $400. a week was NYS un-employments' maximum weekly benefit. His estimate came in at $398.00 and so contracts were signed. Payments with tax and insurance included are now over $563.00 a month and we are behind and served with foreclosure papers
Avoid the escrow situation entirely by opting out of having it in your mortgage payment. Escrow is based entirely on yearly estimates which tie up your funds. You could have simply paid the taxes and insurance separately as the time came and dealt with it as it arose. You need counsel from a foreclosure defense attorney. Use the Avvo Find a Lawyer tab to find one close to you.
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First of all, if you were served with foreclosure papers, I hope you served a formal written Answer to avoid being in default. If not, you should find a local foreclosure defense attorney to assist you. Secondly, to answer your question, there is no legal definition of "estimate" although I think the $165 difference is substantial. However, when taxes are escrowed, the bank usually finds out the exact amount of taxes and escrows that exact amount. Some loans require taxes/insurance to be escrowed so depending on your financial circumstances and the type of loan (FHA for example), escrows may have been required to get the loan. Also, if you are buying a property, the title report should include the property/school tax amounts. It's possible that not enough was escrowed in advance at closing or that taxes increased resulting in a higher escrow. It's impossible to answer this question precisely without having more information. I assume you discussed this with your servicer and they did not know or couldn't give you a satisfactory explanation. You are entitled to get an escrow account disclosure statement which they usually send out at the beginning of each year anyway. If you don't have one, you can ask. You are also entitled to a full accounting of your payment history. You should send them a Qualified Written Request for this information and you can get a sample form at http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/rmra/res/reslettr. More information can be had at http://www.consumerfinance.gov/askcfpb/207/what-is-a-qualified-written-request-what-is-a-qwr.html. I also advise that you find a local attorney experienced in foreclosure defense to assist you in the foreclosure.
There's no legal definition as to what "estimate" means, but that doesn't mean you have no argument. Depending on what the contracts say, it's possible the "salesman" fraudulently induced you into entering the contract by telling you what you wanted to hear in terms of the monthly payment. It's also interesting that you bring up unemployment insurance because while that's technically income, it's intended to be short-term income and most lending institutions that I am aware of don't like to extend credit to people who are relying upon unemployment income as proof of ability to repay the loan. So, it's also possible, again depending on what the papers say, that your loan application may have fraudulent information in it.
How long ago did this estimated payment get calculated? Was the escrow contribution calculated based off tax bills accounting for a prior seller's tax exemptions, instead of the true tax amounts? Did you apply for tax exemptions (such as STAR) on the property? Did the assessed value of the property go up (causing the tax amounts to go up)?
As my colleagues indicate, if you got served with a foreclosure summons, you need to put in an answer, of the bank might win by default. The Real Property Actions law requires the bank to give you a list of low-cost organizations operating in your county that provide foreclosure counseling. Here is the State DFS list: http://www.dfs.ny.gov/consumer/mortg_nys_np_counseling_agencies.htm
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