Your mortgage note contains a provision that addresses any adjustments to your monthly impounds and what lenders can do if there is an impound account shortage. In many cases lenders can demand that borrowers correct the shortage by paying into the impound account which may be accomplished by increasing your monthly payment.
Additionally, most mortgage documents contain a provision that permits lenders to correct any mistakes in the loan documents. This provision typically applies to documentation mistakes but may also enable the lender to increase your monthly payment to correct any errors they identify.
Your first step should be to make sure that the expense items being paid for from the impound account are accurate. You should contact your county recorder office to determine the property tax owed from the time the property purchase closed until now as well as your current property tax rate and bill. You should also verify the actual cost of any other expenses paid from the impound account such as homeowners insurance, mortgage insurance and homeowners association (HOA) dues, if applicable.
You can compare the actual costs for these items to the amount you have contributed to the impound account to confirm if the shortage claimed by the lender is accurate. If the lender's figure is correct, you are likely required to remedy the account shortage and your monthly payment may increase to prevent the shortage from recurring in the future. If the lender's figure is not accurate then you can use the correct property tax and insurance cost figures to resolve the issue.
I also recommend that you carefully review your mortgage note and other loan documents to understand how documentation errors and impound account shortages are addressed. Any payment your are required to make or changes to your monthly payment must be permitted according to your specific loan terms. In short, if a corrective action is not outlined in your loan documents, the lender cannot require you to do it.
If the lender is not cooperative and you cannot come to an agreement or if you believe that the lender intentionally misled you, I recommend that you contact a real estate attorney to review your legal rights. You can also contact your state attorney general or the Consumer Financial Protection Bureau (CFPB) to review your situation more closely. I have included contact information for the CFPB below.
CFPB Contact Information
"B3-6-03, Monthly Housing Expense for the Subject Property." Selling Guide: Fannie Mae Single Family. Fannie Mae, February 5 2020. Web.« Return to Q&A Home About the author