suing my mortgage company

[zahc]

My mortgage company did not pay my 2014 taxes real estate taxes. I am currently delinquent on my 2014 taxes and according to the county, my property will be advertised in the paper if I don't pay in full by end of the month.

The mortgage company, or rather their customer service representatives, will not tell me the reason they have not paid, will not guarantee they will pay by the end of the month, and will not even provide me a date by which they promise to pay. I did get them to promise to disburse my escrow funds before the end of 2015.

My escrow balance is above and beyond the amount needed to cover the taxes, and I have never made a late payment.

I am considering paying my 2014 taxes out of pocket to prevent my personal credit from any damage and then trying to get my escrow money back from the mortgage company.  However, my current theory is that they spent my escrow funds in Vegas.

My lawyer friend said I should go to small claims court. What do you think?

[sumpnz]

Pay the taxes to avoid the foreclosure over the unpaid taxes.  Then refi or otherwise find a way to get rid of that mortgage servicer. Until that is done, demand a full audit of your escrow account. Legal action will probably cost you more than the taxes anyway, with little likelihood of success.  Unless your friend is willing to take your case pro-bono, in which case have at it.

[Firethorn]

I'd follow your lawyer friend's advice. 

As somebody who's only watched a smattering of Judge Judy type shows, it sounds like a slam dunk case to me.  Just remember to bring ALL of your paperwork in.

1.  There should be an escrow contract, or at least an escrow portion where they set out all the legal obligations per your escrow account.  This document says that they'll handle your real estate taxes.  Ergo, they're supposed to pay them.
2.  Bring the evidence that the taxes were not, in fact, paid per the above contract.  Include documentation per the best of your ability of them NOT assuring you that they'd get the taxes paid by the end of the month.  Is any of this in writing?   Are you a two party state for recording?  Get them on record.
3.  Bring in the state notices as not only evidence that they didn't pay, but why it's causing extra harm to you.
4.  I'd sue for 'extra expenses'. Keep it reasonable - day's wages for arguing in court, any penalties the state is charging, court fees, etc...  Don't ask for the moon(don't piss the judge off), but if you can get an extra $2-300, so much the better.
5.  Be advised that they might pay things very quickly once notified that they need to appear in court, and in many states they're forbidden from sending a lawyer to appear in small claims. 
6.  I'd still advise, like sumpnz, that you refinance to a less shady company.  Though I have heard that in at least one case, after screwups like this the court voided the escrow portion of the loan since they proved that they couldn't manage to pay 2 simple bills(home insurance and taxes).  They were forced to refund the entire escrow amount(no interest for them), pay the past due bills out of their own pocket, and from then on the home owner wrote the checks himself.

[brimic]

for future use, is an es row account required in your situation?
I only used one for one year out of the last 15.

[Brad Johnson]

Your 2014 taxes are already being declared delinquent? Wow, strict state. In Texas the 2014 prop taxes wouldn't be considered late until after Jan 31, 2015.

In any case, do what's necessary to get the taxes paid. Keep all paperwork and a log of your time, mileage, costs, etc. Might be worth another call to the mortgage co and tell them you are headed out the door to do two things... A) pay the taxes out of pocket and B) consult an attorney about the matter. See if that lights a fire under 'em.

Brad

[AJ Dual]

Lucky for them your note isn't for a property in WI. We've got some of the toughest property tax escrow laws in the nation.

Their keisters would be in a collective sling so bad it would be hilarious. Granted many states require mortgage servicers to return interest on escrow overages, in WI the borrower gets all the interest. And they have 24 hours to post account updates etc. It's really tough regs here.

[MechAg94]

I think I would demand they audit the escrow account prior to going the court route.  At least make the request.  It might provide you additional backup.

I don't do escrow with my mortgage.  It might be nice, but I would rather worry about scraping up money to pay the taxes and insurance than deal with stuff like this.  The worst I had was with Chase some years ago.  One year they paid my taxes in January then paid the next years taxes early in December.  The following year they audited the escrow account and decided to double the escrow payments since they had paid two years of taxes in the same calendar year.  The balance was just fine.  If the morons had bothered to look at it more than just a line item, they would have realized what was going on. 

Chase was the same outfit that misspelled my name on the mortgage paperwork.  When I complained, the sent me a nice letter telling me that they were spelling my name correctly.  Attached to the letter was a copy of the original mortgage signature paperwork with the correct spelling.  They hadn't even bothered to look at what they were attaching to show that I didn't know how to spell my own name. 

I am not sure if the root of the problem is they are hiring morons or they overload one guy with so much stuff to do, they don't care anymore. 

[Headless Thompson Gunner]

If the money is still in the escrow account, then they haven't spent it in Vegas.  It's an escrow account precisely so that they can't just take the money out and do any ol' thing they want with it.

The first thing I would do is go talk to the county tax collector.  Explain the situation plainly, without any hint of anger or blame, and ask for their help.  Be willing to pay the taxes yourself if necessary.  IME these these people are are eager to help if you're polite and genuine about wanting to fix the problem.  

Then I'd try to talk to the mortgage company.  This sounds like a bureaucratic error on their part, not malice.  They have a lot more to lose than you, both financially and legally, if they let your house be sold for delinquent taxes.  I wouldn't expect much in the way of a solution from 'em, though.  They usually don't have much room to maneuver, either due to their own lumbering bureaucracy or the mountains of regulations and red tape that they have to follow.

Lawsuits would be my last resort.  Maybe I'm too jaded, but I find that lawyers and courts turn simple problems into big problems, and big problems into nightmares.  I'd try a state consumer protection agency or attorney general's office before I started in with the lawsuits.

[AJ Dual]

With that I agree, it's just a one line screwup somewhere and a disconnect on the part of the Mortgage co. Mainly it's just an issue of persistence until you get someone on the phone that has the ability in their system to fix the issue because their job grants them access to the right screen to look it up, say "Oh yeah, Sorry! (click click click) I just sent an ETF or a request to our check printer queue to cut it and mail it out."

[RevDisk]

This is why I paid extra to get a mortgage with a local bank, that cannot be transferred. I have the business cards of every person in their mortgage department. I could walk to their desk in about 15 minutes, drive in 5 or less. Probably cost me a grand or two in extra interest, worth every penny.

[Brad Johnson]

 

If the money is still in the escrow account, then they haven't spent it in Vegas.  It's an escrow account precisely so that they can't just take the money out and do any ol' thing they want with it.

The first thing I would do is go talk to the county tax collector.  Explain the situation plainly, without any hint of anger or blame, and ask for their help.  Be willing to pay the taxes yourself if necessary.  IME these these people are are eager to help if you're polite and genuine about wanting to fix the problem. 

Then I'd try to talk to the mortgage company.  This sounds like a bureaucratic error on their part, not malice.  They have a lot more to lose than you, both financially and legally, if they let your house be sold for delinquent taxes.  I wouldn't expect much in the way of a solution from 'em, though.  They usually don't have much room to maneuver, either due to their own lumbering bureaucracy or the mountains of regulations and red tape that they have to follow.

Lawsuits would be my last resort.  Maybe I'm too jaded, but I find that lawyers and courts turn simple problems into big problems, and big problems into nightmares.  I'd try a state consumer protection agency or attorney general's office before I started in with the lawsuits.

This. Especially the "talk to the tax office" part. They have to deal with these kinds of bureaucratic faux pas regularly and will probably have good suggestions. State banking comission is also a good backup call. Lenders kinda have a vested interest in keeping them happy.

Brad

[zahc]

According to Lawyer Friend,  it is usual to award treble damages in cases like this. He also said that local judges hate banks and love to rule against them. That plus the fact that Stearns lending probably won't show up, means he thinks I should do small claims court.

Due to magic of smartphones, I have recordings of some of my calls.  I didn't notify them they were being recorded, but their own voice system did the usual "quality assurance" schpeal. Where does this put me in terms of legality of recording?

[Viking]

According to Lawyer Friend,  it is usual to award treble damages in cases like this. He also said that local judges hate banks and love to rule against them. That plus the fact that Stearns lending probably won't show up, means he thinks I should do small claims court.

Due to magic of smartphones, I have recordings of some of my calls.  I didn't notify them they were being recorded, but their own voice system did the usual "quality assurance" schpeal. Where does this put me in terms of legality of recording?

You're in North Carolina, correct? Quick googling shows that NC is a one party consent state.

[HankB]

Hmmm . . . if your house is "sold" for delinquent taxes due to THEIR mistake . . . would that absolve you of the loan?

And if so, what if YOU were the one who "bought" the house at the tax sale for the amount of unpaid taxes? 

[grampster]

I had a problem with a large bank when they said I hadn't paid my mortgage payments in a timely fashion and began instituting penalties.  They were wrong!!  I had proof due to when my checks cleared my bank.  With mortgages over my lifetime, I usually stayed a month ahead just in case.  I got snot and nasty from telephone drones.

I sent a fax, a letter, and an e-mail to each of the following:  Chairman of the Board, the CFO, and the President of that bank with my documents and the names, dates and times of the incompetent drones I had dealt with.  Voila.  A week later after a call from the representatives of the big bosses I had an apology and everything magically was solved.

[RoadKingLarry]

I used to have a mortgage. I really like not having a mortgage anymore.

 

[lupinus]

I had a problem with a large bank when they said I hadn't paid my mortgage payments in a timely fashion and began instituting penalties.  They were wrong!!  I had proof due to when my checks cleared my bank.  With mortgages over my lifetime, I usually stayed a month ahead just in case.  I got snot and nasty from telephone drones.

I sent a fax, a letter, and an e-mail to each of the following:  Chairman of the Board, the CFO, and the President of that bank with my documents and the names, dates and times of the incompetent drones I had dealt with.  Voila.  A week later after a call from the representatives of the big bosses I had an apology and everything magically was solved.

This.

Its amazing how fast bureaucratic nonsense is cleared up when someone a little higher up has to deal with something that's supposed to be handled by the little people.

[Scout26]

Everyone in the world has the same first line in their job description:

1)  Keep your boss's boss off your your boss's *expletive deleted*ss.

[zahc]

I called the mortgage broker that sold my original mortgage before it got re-sold. He got me the phone number of an actual loan officer from the current company. After a couple of mostly content-free conversations, I am concluding on my own that they simply haven't paid my taxes due to incompetence, and are overall simply ignoring my petitions. I did submit a complaint through the NC commissioner of banks.

Mr. M****t,
 
Thank you for speaking with me on the phone this evening. It is encouraging to speak directly to someone from S***** lending. However, I was disappointed to hear that my 2014 taxes have still not been paid from my escrow balance, that you were unable to provide a reason why my taxes are not paid, or to assure me that my taxes will be paid by any particular date.
 
As I explained, I have expended a great deal of energy trying to get my taxes paid from my escrow funds. I am not very happy that my taxes are late, even though I have already paid into my escrow account an amount sufficient to cover my tax bill. To avoid my property being advertised as delinquent, I was finally compelled to file hardship paperwork with my county tax office, which I find embarrassing, as I never pay bills late.
 
Please advise me as soon as possible on ALL the points below:
 
1: Please inform me when my taxes will be paid, so that I may update my county, which I am required to do as a condition of my hardship agreement
 
2: Please inform me why my taxes still have not been paid even 28 days after they were due, i.e. what caused Stearns or its subcontractors to fail to pay my taxes on-time,
 
3: Please release me entirely from my escrow agreement with Stearns lending. I feel that I can pay my taxes on-time and with much less stress and personal effort by doing so myself,
 
4: Please advise me if Stearns will compensate me, beyond merely paying my taxes weeks late, for the time, effort, and embarrassment this has caused me.
 
 
Thanks,
Me
My address
my loan number