This is in regards to my mortgage which changed mortgage companies recently.

UPDATED: Oct 2, 2022

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This is in regards to my mortgage which changed mortgage companies recently.

My mortgage changed hands recently. The transition has been anything but smooth. They have been managing my mortgage for 4 months now and recently raised my mortgage payment to almost 3 times what it was stating that it was due to my property taxes being rolled into my monthly mortgage payment. My mortgage payment has always been $808 but they increased it to $1,965. If I deduct my usual mortgage payment of $808 from $1,965, it leaves $1,157 that is supposed to go toward my property taxes. I pay my homeowner’s insurance and they have stated that the $1,157 goes solely to property taxes, nothing else. If I’m paying $1,157 every month, then that comes to $13,884 for a year. My property taxes are around $7,000 for the year. This doesn’t sound right, I’m paying more per month for property taxes than I am with my mortgage payment. How can this be? Everytime I inquire about it, I get different answers from everyone in customer service. Nobody seems to be on the same page as one another and nobody has the same story. I’m feeling very frustrated and helpless.

Asked on October 27, 2019 under Real Estate Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

1) They cannot charge you more than the mortgage paperwork (which is a contract) allows, so unless the mortgage itself says that they can roll the property taxes into the payment, they can't do this at all. Often, they can do this, but only if your % of equity in the property is under a certain percentage.  Check your mortgage to see what is and is not allowed.
2) Even if they can roll the taxes in, they obviously can't roll in or charge you more than your actual taxes.
It seems like you are being overcharged. Your recourse would be to file a breach of contract lawsuit againt them for charging more than they are allowed. In the lawsuit, you could seek a court determination of what can be charged (declaratory judgment), an order limiting what they can charge, and a return of any improperly charged amounts.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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