I made an extra payment on my mortgage that my lender is not giving me credit for. The lender is now saying I owe money on my escrow account. What should I do?
Your best course of action is to establish a paper trail that verifies the extra payment that you made on your mortgage. A cancelled check or bank statement that shows proof of the extra payment should be sufficient. You should also request that your lender provides a monthly mortgage history that shows the breakdown of your mortgage payments including principal, interest and escrow payments over the life of your mortgage. The mortgage history also shows the escrow account balance and when property tax, homeowners insurance and other applicable payments such as mortgage insurance are made from the escrow account. The mortgage history also shows if and when the escrow account becomes deficient. With these documents, you should be able to show that the extra payment was made and understand if the payment was applied to reduce your principal mortgage balance. You can also determine if and when your escrow account became deficient.
Please note that if your escrow account is deficient, the lender can require any extra payments that you make be applied to eliminate the deficiency. You can review your mortgage note and any addendums to the note to understand the terms for your escrow account.
Finally, if you believe your lender is acting in bad faith you should file a complaint with the Consumer Finance Protection Bureau and your state attorney general. Additionally, you may want to contact a real estate attorney to review the situation and represent your interests with the lender.
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