Can I get my loan company to return excess escrow payments?

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Can I get my loan company to return excess escrow payments?

For the past 2 years I have paid about $3500 extra in escrow. I finally got them to reduce my payment to what it should be. What can I do to get them to refund the extra escrow payments? They said I did not over pay. I looked at my transaction history and have seen where I think the money went to – 2 extra payments I did not make. And the extra payments didn’t even all go to principal.

Asked on November 19, 2011 under Real Estate Law, Washington

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If you believe that the loan company overbilled you, misapplied funds, and/or did not honor the terms of the loan (i.e. charged you more than they should have under the terms of the loan or contract), your recourse would be to sue the company. You would bring a lawsuit based on breach of contract--violation of the terms of the loan. If you can show that they violated the loan's terms, you can seek return of the money. Before doing this, reread your loan agreement(s) carefully--you want to make sure that it's not the case that they could do what they did with the money (e.g. use it to prepay interest ).


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