Q: I wanted to thank you for continuing to keep on top of the Taylor, Bean & Whitaker mortgage mess. We were former customers of Taylor, Bean & Whitaker but refinanced with a new lender in July, 2009 and closed on the new loan weeks before Taylor, Bean & Whitaker went public with the mess they were in. Our new loan is fine and we have not had any issues with the refinance.

However, we still have not received the money we had in escrow with Taylor, Bean & Whitaker, which amounts to about $1,000. We funded a new escrow account during closing, so our insurance and taxes have been paid in full and on time. However, we could use that $1,000 that is just sitting there!

I call Taylor, Bean & Whitaker about once a month to “check” on my money and am told the same thing every time — the money is there, the amount matches every time but the money has been frozen by the bankruptcy judge and the company has no idea when it will be unfrozen.

The last time I spoke with them, I was informed the money was being released in phases, with the highest priority going to those that have pending or late tax/insurance/etc bills. Once that phase is complete, “they” (not sure who “they” refers to) will go back to the bankruptcy judge to learn what is the next phase for releasing additional funds.

Even our IRS Form 1098 from Taylor, Bean & Whitaker shows the escrow balance on it.

Is there anything additional I should be doing? Or do I just keep calling and checking on things?

A: “They,” meaning the people who are answering the phone at Taylor, Bean & Whitaker, are giving you pretty accurate information. I’m told that escrow monies are mostly still frozen, and have been hearing the same thing from readers who leave comments on our other Taylor, Bean & Whitaker stories on the ThinkGlink.com blog.

Honestly, that may be good news. When funds are frozen in this situation, it means nothing can happen without a court order, and there is less chance those funds will disappear.

As a general aside, it’s interesting that the bankruptcy court has frozen the escrow accounts that are to be used for the payment of real estate taxes and home insurance payments.

When lenders set up these tax and insurance escrow accounts, these accounts are intended to protect the lender from borrowers that fail to pay their real estate taxes or insurance premiums. Holding the money aside insures that the money will be available for the payment of real estate taxes and homeowner’s insurance.

You would have thought that lenders would be required to keep these accounts separated and that the funds would be your funds and not subject to the bankruptcy court.

We can add this to the list of issues that have totally failed during the recent mortgage and housing crisis. You’d think there would be a law that recognizes that funds held in escrow are separate from the servicer’s general funds and that once the escrow funds are tied to the owner of the home, the funds are to be immediately released to that owner.

I know it’s frustrating, but you’re doing the right things. Keep calling and staying on top of the situation. You might also regularly contact your state mortgage regulator to find out what the state is doing to help its Taylor, Bean & Whitaker customers.

Let me know what happens.

For more information on TBW and the continuing mess, read our prior articles and the posts by our readers. Also, make sure you post your comments and experiences here.

Taylor Bean & Whitaker Customers Still Waiting for Answers

Taylor Bean And Whitaker and 1098 Mortgage Interest Tax Forms

Taylor Bean and Whitaker Continuing Mortgage Lender Problems and Escrows

TBW Frozen Accounts