Q: Before September, 2009, we were making all our payment on time to Taylor Bean & Whitaker Mortgage Corp.
Once they shut down, another bank picked up our loan. We were told that our escrow account was negative by about $2,200.
I am so confused why this happened. Why weren’t we aware of the negative balance in our escrow account during the time that Taylor, Bean & Whitaker serviced our loan?
I am so upset because this has caused our payment go up, which is something we cannot afford.
Is there anything we can do and how could of this happen to us? Was there anything that could have been done before we went into a negative in our escrow account?
Also, what can we do so something like this doesn’t happen again?
A: I continue to get a large amount of mail from Taylor Bean & Whitaker borrowers who find their accounts in trouble since the company shut down in August, 2009.
The biggest area of concern is escrow funds. Borrowers are concerned that property taxes and insurance premiums have not been paid out of escrow funds that have been frozen. And, many borrowers are complaining that their escrow accounts are in a negative balance.
There are three reasons why your escrow account was negative by such a large amount.
First, it’s likely that your property taxes and insurance premiums went up in price and the lender had to shell out extra cash in order to keep paying them on time.
The second possibility is that there has been a mistake. You should contact your lender and ask for an audit of the account. Then, you should pull copies of your property tax bill (if you don’t have them on hand, you can get copies from the tax office in your county) and make sure the numbers line up.
The last possibility and the one that many former Taylor Bean and Whitaker borrowers are facing is that the money they deposited with Taylor Bean and Whitaker was not transferred to your new lender. The new lender needs to pay these taxes and insurance expenses and passes on these amounts to you. Since the account does not have enough to cover the payments, the bank increases the amount you need to pay on a monthly basis.
We’ve had lots of mail and comments at ThinkGlink.com from former Taylor Bean and Whitaker borrowers telling us that their new lenders have hit them up with increases in what they need to pay to fully fund their escrow accounts. The new lender claims that the funds are tied up in the Taylor Bean and Whitaker bankruptcy filing and that they need to get that money from the borrower in order to pay property taxes and insurance premiums.
But it seems odd that the lender is able to buy the servicing or have the servicing rights transferred by Taylor Bean and Whitaker and then claim that it gets the benefits of servicing the loan but won’t accept responsibility for not having obtained the funds that were held in escrow.
You should determine why you have a deficiency in the escrow account and then you can have another conversation with your lender.
You might also want to have a conversation with the state mortgage regulator about your account and the way your new lender is handling this issue.