Two of my least favorite institutions combined into one problem!

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11-18-2010, 11:53 AM
indysteel

Two of my least favorite institutions combined into one problem!

Ugh. I've gone round and round today with my former mortgage company and my former county treasurer. Between the two of them, I'm not sure who's worse.

I sold my former home in May. Closing was just days before the May installment of property taxes were due--taxes that I was liable for per my contract with the buyer. My lender repeatedly assured the title company that they had not already paid the taxes out of my escrow account, so I paid them at closing. Come to find out, the lender had paid them. A month before closing! They assured me they'd take the steps necessary to get a refund but admitted that it might take six months.

So I patiently wait. And wait. And wait some more. Having not received the refund by November, I called the lender again today. Apparently, the county treasurer told them way back when that they merely applied the double payment to the November installment and that no refund would be forthcoming.

I then called the treasurer and was told much the same thing. Now, I wasn't liable for the November installment per the sales contract with my buyer. Of course, the treasurer didn't care about that. They also indicated that if I had contacted them immediately after closing, they likely could have given me a refund. Argh! Why did I rely on my lender for this!!!!?????

So, my only recourse is against my buyer. Now what are the chances that he'll just cough the money up, especially since his own lender probably escrowed the funds in anticipation of receiving a bill? The lawyer in me says slim to none. It's not a huge sum of money, but it's enough to bother me, at least for a bit.

Argh. The only thing I hate more than dealing with my mortgage lender is dealing with the county auditor/treasurer/assessor. It's not just that I didn't like what I was being told. They were so rude in explaining it to me. I know they must take a lot of abuse, but I work in government, too. As irritating as the public can be, they're the ones paying my salary.
11-18-2010, 05:14 PM
Catrin

So sorry to hear about this frustration, hopefully things will work out.
11-18-2010, 06:18 PM
Zen

Take they buyer to small claims court?
11-19-2010, 05:54 AM
indysteel

I've thought of that Zen, but it's probably more trouble than it's worth. I think I'll just send a letter. It likely won't elicit a response, but there's also nothing to lose in sending it. If he reimburses me, it'll presumably be merely an act of good faith.

With our current house, we've thought about eliminating the escrow and paying taxes and insurance directly. Frankly, it's a lot easier to leave out the middleman--assuming the bank will agree to it. Sometimes they do, sometimes they don't.
11-19-2010, 10:10 AM
JennK13

What has the Lender said about it? I would think they have some responsibility since it was their mistake. Then they can deal with the treasurer. And I wouldn't think it's that big of a deal for the County to reimburse you and bill the new owners......
11-19-2010, 11:01 AM
ny biker

For starters, I would go back to the county treasurer's office and try to get them to reimburse you. You might need to go above the person you've already spoken to. You do not own the house, you can prove that with documentation, you are in no way liable for the November payment.

If that doesn't work, you need to explain the situation to the buyer and ask them for help. They might say no, but then again they might reimburse you without hassle. If it were me, I would want to know so I can get my bank involved, because they should not be paying a tax payment that has already been paid. If they do, then once again the county has been overpaid. Also, I absolutely would want you to be reimbursed because it's just not right for you to pay taxes on my house.

I don't see how you can take the buyer to small claims court if you haven't tried other means to get the money from them.

Good luck!!
11-19-2010, 12:40 PM
jessmarimba

I think the treasurer might respond if the Lender contacted them - since it is their mistake - and they're more "important" than you. Will the lender help you at all?

(I had a problem with income taxes in Virginia - once my CPA told them the exact same thing I had, they admitted their error, but I got nowhere with them for months).
11-19-2010, 03:50 PM
malkin

Yuck. Just think if your health insurance co. were involved too it would be a perfect storm.

Seriously, good luck.
11-19-2010, 04:54 PM
OakLeaf

Quote:

Originally Posted by malkin

Yuck. Just think if your health insurance co. were involved too it would be a perfect storm.

Seriously, good luck.

Don't leave out the phone company!

I'd contact the title agent first - they're the ones who botched the closing. They should've verified with the treasurer whether or not the taxes had been paid. Not only shouldn't they have relied on the lender - if the escrow was that far short of what it should've been if the taxes hadn't been paid, that's a red flag they should've noticed.

If you get no joy from them, there's no harm in getting in touch with the buyers.
11-19-2010, 05:26 PM
emily_in_nc

I'd try asking the buyer first. If I were the buyer and hadn't already paid it, I'd pay it. Most people aren't out to cheat the system. If I misunderstood and he'd already paid it at closing, then I agree that he won't pay it and shouldn't have to double pay, of course. But if he hasn't paid it, then I can't imagine that he wouldn't pay. A simple letter to the buyer explaining the situation may elicit a check and problem solved.

Good luck!
12-14-2010, 01:17 PM
Mr. Bloom

Indy, I overpaid my Monroe County taxes by $150 five years ago and I still don't have the refund yet!

BTW: I'm getting married next week...after the holidays, let's actually get that planned dinner with Mr. Indy and Mrs. Bloom. :)
12-14-2010, 04:48 PM
indysteel

Quote:

Originally Posted by Mr. Bloom

Indy, I overpaid my Monroe County taxes by $150 five years ago and I still don't have the refund yet!

BTW: I'm getting married next week...after the holidays, let's actually get that planned dinner with Mr. Indy and Mrs. Bloom. :)

OMG! Congratulations to you and the future Mrs. Bloom. I'm sorry we've been rather elusive. Free time is at a premium in the Indysteel household.

Enjoy your festivities. Send me a PM with the details.
12-14-2010, 05:48 PM
indysteel

Quote:

Originally Posted by ny biker

For starters, I would go back to the county treasurer's office and try to get them to reimburse you. You might need to go above the person you've already spoken to. You do not own the house, you can prove that with documentation, you are in no way liable for the November payment.

If that doesn't work, you need to explain the situation to the buyer and ask them for help. They might say no, but then again they might reimburse you without hassle. If it were me, I would want to know so I can get my bank involved, because they should not be paying a tax payment that has already been paid. If they do, then once again the county has been overpaid. Also, I absolutely would want you to be reimbursed because it's just not right for you to pay taxes on my house.

I don't see how you can take the buyer to small claims court if you haven't tried other means to get the money from them.

Good luck!!

From the county's standpoint, I was the one liable for the November taxes. We pay property taxes in arrears. So, the November 2010 installment is for 2009. The buyer merely agreed to pay them per our contract. So, that's what his liability to me is based upon. I'd seek recourse against my lender, but short of a lawsuit, banks are not in the habit of coughing up money. They are beyond irritating to deal with.

I still haven't sent a letter to the buyer. I have one drafted, but I actually thought it would be better received in January. He should be getting an escrow analysis from his lender near the first of the year. From that, he should be able to see that he didn't pay the November installment.
12-14-2010, 06:31 PM
abejita

We do not use escrow for our taxes. I just put the money in our savings account each month and pay the lump some at the end of the year and I get a little interest to boot.
12-14-2010, 07:13 PM
jobob

Quote:

Originally Posted by abejita

We do not use escrow for our taxes. I just put the money in our savings account each month and pay the lump some at the end of the year and I get a little interest to boot.

Well, good for you, it's nice you have that option. But, unfortunately, some mortgage programs and lenders don't allow for that. It's a way the lenders make extra money, under the guise of "protecting themselves". :p
12-14-2010, 07:21 PM
abejita

Quote:

Originally Posted by indysteel

With our current house, we've thought about eliminating the escrow and paying taxes and insurance directly. Frankly, it's a lot easier to leave out the middleman--assuming the bank will agree to it. Sometimes they do, sometimes they don't.

Only mentioned it because she was thinking about it...
12-15-2010, 12:57 AM
Mr. Bloom

Indy, even though it was charged from the escrow, the buyer may have an issue since the escrow analysis won't be completed for a year and then the amount of the overage may be spread out in reduced escrow over the following 12 months from that...if they are stretched for cash, it becomes messy.
12-15-2010, 04:45 AM
indysteel

Quote:

Originally Posted by Mr. Bloom

Indy, even though it was charged from the escrow, the buyer may have an issue since the escrow analysis won't be completed for a year and then the amount of the overage may be spread out in reduced escrow over the following 12 months from that...if they are stretched for cash, it becomes messy.

I assume the amount he'll have to pay into escrow next year will be adjusted downward to account for the extra money he now has in the account because he didn't pay the November installment. If he has too much, they may refund him some money now as, by law, they can only keep so much money in the escrow account to cover the year's taxes and insurances. Taxes on the house are relatively low so I doubt he's all that much over the amount they can retain, especially since they're entitled to cushion the account to some degree.

Either way, it's not all that relevant to me. I'm merely hoping his excrow analysis will prove to him that he did not pay the November installment. I assume if he feels strapped for cash, he'll just ignore my letter and I'll just have to eat it. If we were really talking about a substantial sum of money, then I'd file a small claims action against him if he refused to voluntarily refund the money. But because we're really just talking about a relatively small sum, if he ignores my request, I'm just going to go on my merry way. The point is that I have little to lose by sending him a letter that makes my case for a refund as clearly as possible. While the lender and the treasurer/auditor's role in all of this is irritating, it's the buyer who was enriched by the fact that I paid the November taxes, so for me, he's the logical and really only person to pursue.