You did everything right. You saved money, you put down 15 percent towards a house purchase, and you opted to escrow your taxes and insurance so you would not face a large tax bill every year. Unexpectedly, you received a bill in the mail for your taxes. Why?
Sometimes an Explanation is Necessary
Typically, when your taxes are included as part of your escrow payment, the bill is sent directly to your mortgage servicer. The mortgage company then pays the bill, and you simply see it noted on your next mortgage statement. Sometimes, things go wrong. Some of the potential issues include:
- Your payment was late - if you made any mortgage payment late, the mortgage company is not obligated to pay your taxes in full. Typically, this is not what has happened, especially if you are a new home buyer.
- Your loan servicing company changed - one of the most common reasons why these bills are sent to the homeowner is because the servicing company changed. The new servicer may have taken over between billing cycles and your tax bill was inadvertently sent to the old servicing company and therefore was not paid.
- A simple clerical error - sometimes mistakes happen when the tax bills are being issued and the town or state makes a mistake. It may take you a few days to figure out what has happened and why.
What to do if You Get a Tax Bill When Your Taxes are Escrowed
There are some practical steps you can take when you have received a tax bill to solve any problems. Whatever you do, do not ignore the bill because that could lead to other problems. Here are the steps you can take:
- Call the tax office - first, make sure there is not a mistake at the tax office. Call them and advise them your tax payments are being escrowed by your mortgage company and ask them what they have on file. If they tell you your tax bill was not paid by the mortgage company, you need to follow up immediately.
- Contact your lender - if for any reason you learn your taxes were not paid by the lender, contact the lender immediately. There are regulations in place which protect consumers in these instances. Find out what happened and what steps they are taking to resolve any issues.
- Follow up - once you have notified the lender about a problem with your tax bill, you need to make sure you follow up. Ask for an escrow statement, make sure the tax bill is paid in full, and make sure you carefully review all your mortgage statements to ensure your escrow account is fully funded.
Remember, if your mortgage company fails to pay your taxes when you have had them escrowed, you could be facing a lien being placed on your home for non-payment or you could potentially be forced to defend against a tax seizure of your property. Never ignore a tax bill which you receive, even if you believe it is an error.
Escrows Continue to The End of Your Mortgage Loan
Remember, in most cases, your mortgage lender will keep your escrow up until the term ends on your mortgage. You may wish to consider refinancing your home if you feel your mortgage lender is not making your tax payments in a timely manner.
Contact an Expert Mortgage Loan Officer for Help
First Savings Mortgage has been around the D.C. Metropolitan area for nearly three decades. During this time, we have helped hundreds of residents purchase new homes and refinance their current homes. We believe a well-informed consumer is our best customer and we go out of our way to make sure you have all the information you need to become a successful homeowner.