Monday, September 14, 2009

Malevolent Scum

My home lender, that is. We'll just call them "Blank of America."

Last month, they sent me a bill in which they explained, "Oops, we misfigured your property tax escrow amount. Either send us $2,000.00+ American now and pay a little higher house payment OR send nothing now and pay a much higher house payment."

Indiana real-estate taxes are insane right now; the state fiddled with the way they are figured and it is messed up six ways from Sunday. So, okay, Blank of A can't maybe hire the really smart tax accountants for small fry like me and my piddlin' home loan. I moaned and complained and cut back on things and produced the exact amount the miserable weasels demanded with 24 entire hours to spend. They got it, too, I can go look it up on their website.

...That would be their website that still DEMANDS I pay them the "much higher house payment." The one I was avoiding by pullin' 2K cash outta not thin air but my housepainting, plumbing, out of pocket medical, car maintenance and general hobby, movies, restaurant dinners, books and fun budget -- if you don't have a house, the rest of that won't do any good anyhow.

So here I am as of now, $2 thousand bux short and per my lenders friggin' website -- where you can get a salesweasel 24/7 but actual bank-type help only during very limited hours -- I still gotta come up with an ungodly sum by the middle of the week. Do not have, not and pay the gas bill, too.

So I will be calling them at the crack o' noon or whenever exactly it is they roll their dewey pink rumps outta the silk sheets with their hired bed-companion, since nobody would sleep with 'em fer love, and I will be askin' just what the Sam-dammit-Hill they are after doing?

Update: Called, had to make four tries to get A Real Human Person, spent a very, very long time on hold, then got them to admit that indeed, I did only owe the lower amount, whoopsie! Got it paid. On time.

It used to be that smalltime borrowers like me were pretty safe once we'd got our loan; you can't get blood from a turnip and we were quite simply too small to be be worth messing with. This is no longer the case. Lenders, feeling the pinch of inevitable effects of their own irrational exuberance, formerly bouyed on the back of insane Federal lending policies, are now skinning every flint and charging the suckers for the free candy in the lobby.

I am gonna move this loan to a local bank somehow, or at least a bank with an actual office here in town where I can walk in and dare 'em to look me in the eye when they pull such tricks. They probably still will and smile all the while, but better some middle-manager I can see and who probably signed off on the skullduggery than a faceless (and innocent) Mumbai phone-bank worker who has no power, wasn't responsible for it, has no discretion in his or her responses and is paid to be unhelpful; I'd at least like to be shortchanged in person. Oooyeah.


Joe Huffman said...

I have my own stories about these scum bags. They aren't nearly as costly as your stories but they are infuriating. I would withdraw all our money from them if it weren't so inconvenient (IRAs, etc.). I should get tell our accountant to "get 'r done" and then thumb my nose at them.


Capitalism = Terrorism
Communism = Impossible

Anonymous said...

"Indiana real-estate taxes are insane right now; the state fiddled with the way they are figured and it is messed up six ways from Sunday."

Well, maybe insane if you live in Indianapolis. But those outside the wire are quite happy with property tax redux. Mine went down by 5%.


Shootin' Buddy

Roberta X said...

What a surprising insight, Tor; have you any reasoning to support it? Any facts, any data? Any closely reasoned opinion, even?

In the United States, banks and other home lenders are, in fact, not particularly capitalistic institutions. They operate in a highly regulated environment and one that is greatly distorted by the presence of quasi-governmental lenders -- "Fannie Mae" and "Freddie Mac" -- all of which tends to make gaming the rules more rewarding than the dull business of simply lending money at interest and taking one's few percent profit over the term of the loan.

Where a capitalist economy rewards honesty over the long term, a managed economy rewards pushing the rules until they squeak, having close ties with the regulators and excessive complexity as a way to conceal profits and evade the rules. Because a managed economy is not stable -- the rules can be changed at legislative (even bureaucratic) whim -- businesses under it tend to look at very short-term profits, at quarters rather than decades.

Communism is not only impossible, it is undesirable; having to mechanism to signal the value of goods and services, it must inevitably produce shortages and starvation. Communist economies also produce very low home ownership -- mustn't have that nasty profiteering private property, even if it has been passes from father to son to generations....

Fuzzy Curmudgeon said...

Part of the problem was the three tax bills we got last year -- the late one from the year before, plus the two we were supposed to get normally.

The banks don't seem to have figured out how to deal with that, so it appears that escrow got figured based on all three billings instead of just the two for last year. Both the mortgages I pay went up significantly when they probably should have stayed the same or even decreased a bit.

Roberta X said...

SB: So I'm told. Are you sure it holds true througout your community?

What was done in Indy generally pushes the bounds of the law; assessed values are hugely misaligned to the actual market value of homes. If I could sell my house to the state for what they claim it is worth, I would take a profit of almost $50,000.

og said...

Ouch. My thoughts and prayers for a speedy and equitable resolution of this cluster^(*$.

Went through the same thing a few years back, and additionally discovered I was paying the property taxes for the empty lot next door. Took ages to get it sorted out, during which time the bank increased my escrow the amount needed to pay the taxes that weren't due from me.

I notice bankers never seem to have difficulties in this regard.

WV: Torastan. Where Tor learned the goofiness he spouted.

red said...

Check your property tax form to make sure you still have the Homestead and Mortgage exemptions. They might have magically disappeared like ours did. That caused our property tax to double. That hurts!

Hope you get it straightened out!

Anonymous said...

"SB: So I'm told. Are you sure it holds true througout your community?"

Where I live did very well. The neighborhood next to me took a bath.

Remember I bought my house when I worked for the government and have been there a long time. Indianapolis has more to pay for so your wagon is going to be heavier.

I wish Indiana had abolished property taxes pursuant to my plan. We would be ground zero for growth now!

Shootin' Buddy

Turk Turon said...

You have my sympathies! I have had one mortgage or another for 25 years or so. Every year I get one of those cursed "escrow adjustment" statements, and every year it goes up.

The one year it went down was back in the 1990's. I realized I hadn't received an escrow statement, or it was three months overdue, so I was flipping thru the little booklet of payment stubs to see how many slips I had left. Bound into the last page of the payment book was a check for nearly $2K. It had been there for nearly three months. They had actually adjusted my escrow DOWN, and sent me a refund, and their MO was to include the check as the last page of the payment book. Cute. I forget the reason for the big refund; probably a re-fi that year. But anything that delayed that check being presented for payment was a plus for them.

Banks just don't care as much about correcting errors in their customers' favor as they do about correcting errors in the bank's favor. And that's typical of most businesses, which focus a lot of attention on Accounts Receivable and much less attention on Accounts Payable.

If I were in your situation, I would make the lower payment on time, by any means necessary (as Malcolm X used to say). You seem to have all your ducks in a row: you paid the escrow shortage, now you can make the lower monthly payment. Having an excellent on-time payment record will help when you go to refinance, which sounds likely!

Crucis said...

A friend got into similar trouble and finally got it cleared up. He suggests you go to the Dave Ramsey website and check the lists of mortgage lenders there. Ramsey also advocates getting mortgages from local lenders. Unfortunately, in some areas, that can be difficult.

Just a suggestion.

mts1 said...

Listen to Red. I had to take my disabled aunt to the county assessor's office when they raised her taxes from $125 to $3200 in one year. It turns out they took away her old age, homestead, and mortgage exemptions. We got it lowered to $1900 once they were restored.

Yeah, see your township (if you're in one of the few townships left with an assessor's office) or county assessor if your assessment is out of sync with your market value. Did you ever have a garage or outbuilding that was torn down that you may still have on your square footage? Heck, see if you can get your taxes separated from your mortgage, then put them on a loan or charge them if you can't pay them all in cash. I checked my assessor two weeks ago when I found out how little two houses around me were listed for, and in addition to knowing I'm assessed pretty fairly, as well as being paid-up, I found they had my mailing address wrong (!), so that's why I didn't get my statements.

sam said...

Prop. 13. One of the few things Kommiefornia got right.

And, believe it or don't, it is easy enough in the PRK, to petition the county tax assessor, if the assessed home value exceeds market value, to get the tax assessment reduced.

Bruce B. said...

When you refinance with a local bank make sure they don't sell their mortgages to a mortgage broker. Many local banks do that and you'll wind up dealing with the "faceless (and innocent) Mumbai phone-bank worker who has no power" again.

I have a co-worker who was almost foreclosed on because he couldn't keep up with who was holding his mortgage and then selling it to the next broker and he didn't know where to send the payment check.

rickn8or said...

Yes, there IS something to be said for dealing with a small, local bank rather than Mega-Bank-of-We-Don't-Care.

Preferably, one in which one of the vice-presidents is someone you went to high school with, and knows you'll dangle them off the floor by the neck if they screw up your paperwork, and you can walk in the back room and talk directly with Miss Essie, the head bookkeeper.

Meanwhile, my County Assessor is convinced my property is worth 40 percent more than it was four years ago.

But I agree with Turk; better to be in the "I paid what you told me to, when/why did you change your mind?" camp.

Rick T said...

Why in all that is holy are you letting Bank of Anemia pay your property taxes????? Tax and Insurance impound accounts are just a way for the bank to jack you around, as you have seen...

As soon as Icould I cancelled the escrow account and reduced my mortgage payment to pure Principal and Interest. I get to pay my Insurance in 12 monthly payments from my insurer (USAA), and I do my *own* savings account to cover our twice a year property taxes.

It doesn't hurt that here in California we still have Prop 13 in force so our taxes can only go up by 2% per year.

Roberta X said...

Rick T: 'Cos I could not, as a first-time home buyer of modest means, get the loan unless I agreed to be escrewed, er, escrowed on property taxes.

In Indiana, we pay 'em in arrears (and out arrears, too), so the first year-plus, I was paying the former owner's; and I had bought too late in the year to file for the various exemptions for the next year, meaning I was stuck with one more year of no exemptions; they should (should) kick in on the tax bill I will pay next year, unless the assessor's office lost the paperwork, which should mean Blank of Acirema will get to write me a biggish check of my own money that they had to play with for a year. Egads.

Joe in Reno said...

1)If like the rest of the county, you are upside down on your loan(you owe more than home is currently worth), it will be virtually impossible to re-fi using conventional lenders unless you have the ability to do a rate reduction refi. This is a loan, that like it says, is done soley to reduce your interest rate. You can't take cash out, however, some of these loans allow you to add ALL the costs of swapping to the loan balance, including tax impounds, insurance,etc.. The additional cost to your monthly payment is negligible(usually in the $6-$10/m borrowed per month)and there is $0 out of pocket.
The cute thing about them is if your lender of choice uses any fed help like fannie, freddie, or fha and you have made your payments in full, regularly and on time for the last 1 year, you can't be denied-PERIOD.(Current as of 2 years ago, I haven't done one since the economy started to tank.)

2)The absolute best lender is the mom & pop loan co. If they have the capability to cover your loan, they can get a much better return and, I'm betting, a more secure investment on their money from you than any CD right now, even if they have to pay a penalty for early withdrawl. I'm thinking it will take at least 5 & probably 10 years before we see anything close to a "liveable" interest rate paid by financial institutions. Who would you rather pay your hard earned dollars too?? Faceless uncaring bank or someone you know will appreciate receiving a nice check every month.

3) The last option is the private investment group. Usually friends and business aquaintances who know you are a good bet. Several kick into a pool to re-fi your loan and get paid interest and principle every month based on their percentage of investment. Same bit as #2., who would you rather pay your money to. The key to making this work is to use an escrow payment company. You write a check to the escrow co. and they distribute it every month + do 1099s and statements at the end of the year. Usually the setup fees for the account are less than $500 and they charge $5-$10 for every check they write each month. Who pays the fees are negotiable but I usually split them 50-50 with the investors. You get a loan you can live with and the investors get a decent yield.

If you choose #2 or #3 make sure you do everything in writing. Essential as far as I am concerned when dealing with friends and family. Hard copy pretty much eliminates any hard feelings down the road and settles any squabbles pdq. Again an escrow co. can set you up or if you know a decent local attorney(ahem). Make sure you buy a new "lender's title insurance policy. If you have bought one in the last 5 years there are usually substantial discounts on a new one.

I've done all of these over the years very successfully and never bit got bit on #2 or #3. The so called professionals always seem to be a bunch of idjits, crooks, or just 2 plain lazy to deal with.

I know you don't want charity, just remember, you are PAYING them for the use of their money(and pride goes before the fall{;>)).

Good luck and best wishes.

Joe in Reno said...

Per your update:

I always insist on the semi-human touch, try this site. I've had good luck with it.

Anonymous said...

i used to work tax escrow for a bank, not yours. i have seen all manner of wierdness. there are several things you might like to look for.

first you should make sure that your escrow is planning on paying an amount next year that is reasonable. several times i saw someone who got a one time assessment, and the computer isn't smart enough to realize that it is only the one time you will have to pay that much. get ahold of the tax assessor and get him or her to cough up an estimate of next year's taxes with any exemptions and such. make him fax that info to the bank. then ask the bank to use that info to recalculate your payment.

the next thing you need to look for is whether someone messed up the closing paperwork. you can bet that i will be watching that like a hawk when i buy. since you pay in arrears, you are paying the previous owners taxes, just like you said. that means there should have been money set aside in escrow that should have come from the seller. that's a huge part of closing, the totting up of who pays what part of taxes into escrow. sometimes people mess that bit up. ask the bank to pull your loan file (they can pull the actual hard copy in a day or two) and research the closing paperwork. it's called the HUD1 i think. it's been a few years, so i may have the wrong number. just say HUD form, they'll know what you are talking about. if you find that you were screwed at closing you may be able to go after someone for the missing money. this stuff is done by lawyers for a reason. you can usually hold them accountable. i had to do it all the time.

if my old bank was typical, there is one or two people that handle ALL of Indiana's tax issues. get the direct line phone number of that person and be nice to her (they're usually women, i was an anomaly) get her on your side, and she will usually help you out.



Rick T said...

Roberta, I'm not surprised you were forced into an escrow account. Lots of good dollars to be made loaning your money out while it accrues waiting for the tax payments...

We used to have a mortgage with CountryDied. Then one day their weasel computers decided that the Home Owners insurance policy that they approved when the original mortgage was written wasn't sufficient and they were going to move me to their overpriced plan.

Nazzo fast, Chum! I called them in high dungeon wanting to know what had changed.. All I got from the drone on the other end was Humina, humina,humina... Then a Never Mind.... We refinanced that loan ASAP away from those clowns.

I now have a 15yr fixed with my credit union (I've been a member for 20 yrs or so) so I shouldn't have to deal with the BS.

Mark Alger said...

You have my deepest sympathy for your loss. I am SO glad I have severed my cx to Ba-- er, BLANK of America.

So glad to hear it worked out OK so far. I'd be looking to refi if possible -- not that you need MORE on your plate. Just to get away from the greedy, scum-sucking... erm... (Family blog.)


Caleb said...

Yo Bobbi.

I believe in capitalism. Expect a phone call from an authorized loan representative that might or might not be me.


Sendarius said...

Sorry, but as a native of a different sunny clime:

What the heck is "property tax escrow"?

"Property tax" I understand, "escrow" I understand, but together? Semantic null.

I own property here in Oz, I am liable for the property tax. What has the mortgage lender to do with it?

Comrade Misfit said...

Here's the thing: Even if you do get a mortgage from a local bank, they will, in all likelihood, not keep it. They will sell the mortgage to someone else, but they will still be the "servicer", which means all they will do is take your payment checks. They won't have the ability to negotiate any changes or deal with anything that does not involve taking your payment checks.

Anyway, why not just name the bank? Some of them have trolls who look for people blogging about problems and they can help. Companies are becoming sensitive to the fact that blogged complaints can rise very high on a search engine's rankings.

Roberta X said...

"The nail that stick up gets hammered down," is why. In this age of merchantilist mega-banks, where succeeding depends way more on pleasing the regulators and properly schmoozing Congressbeings, I am not interested in going out of my to get crosswise with the loathsome rats who, by a chain of circumstances outside my control, ended up owning my house. Why placate me when it's so much simpler to solve the problem by swatting me like a bug?

Roberta X said...

Sendarius: "Property Tax Escrow:" My lender, not trusting my irresponsible little self to pay the property tax bill in full and on time (it comes twice a year, like a Temperance matron), instead charges me a bit extra on every payment and stuffs that into an escrow account, which it then uses to pay the tax. Indiana property tax can be substantial -- mine is idling near 10% of the purchase price of the house. Though there are a number of large exemptions which should apply to me, they have not yet taken effect, as we pay these taxes in arrears, meaning for the previous year. The previous owner didn't have any exemptions and I bought the house after the filing deadline for last year; so I don't get any breaks until next year's tax bills, if they haven't lost my exemption filings, which the assessor's office has taken to doing.

Meanwhile, Blank of Acirema is calculating this years escrow amount (to pay my 2009 taxes, billed next year) on the '08 bills they have received this year, which have no exemptions applied. So I am scrod and will see no money back even if the Assessor gets it right until the next time Blank of A refigures my escrow....which they won't 'til about this time next year. If then.

Summation: BOHICA.

Sendarius said...

Oh, OK.

In all my mortgage dealings, the "property tax" element was simply a clause in the contract that said (I paraphrase) "You WILL pay the bill."

It usually was listed with the other obligations that I was taking on, such as property insurance etc.

Maybe my bank trusts me more, but I doubt it.

Justthisguy said...

Dang, I thought I was angry at the Snake (Boa) and all I have with them is an inconvenient checking account!

Have you thought of going with BB&T? They seem pleasant and the boss there claims to be an Objectivist.

They only have branches in the former Southern Confederacy, though, so Hoosiers may be out of luck. That's a shame: You seem intelligent, educated and well-mannered. Are you sure you aren't really a Southern gal?

dave said...

I went with a local lender for the house I bought a month and a half ago. My little (three whole branches!) bank had already arranged an underwriter (American Southwest Mortgage) to service the note. Even better, I've not even made my first payment and I've already been told that Am. SW. has sold my note guessed it, Blank of America.

You just can't win.

Zendo Deb said...

escrow is the problem....

Most folks don't have a choice. But if you do, don't have the banks manage your taxes and insurance.

Sure they pay you interest. (What's the rate today?) But the hassles are immense. And you just plan on it the same way you plan on paying your car insurance twice a year.

And Tor, Capitalism does NOT equal terrorism. The real name is FREE MARKETS. (Capitalism was a pejorative term coined by Marx - or Engles - to make Communism be so much better.)

The fundamental cornerstone of Free Markets is Freedom. The freedom to choose, as Milton Friedman said. Don't like something? Don't buy the product. Don't watch the program. Don't live in that state.

So far, we are still a relatively free country. Not like we used to be, but better than the UK, most of Western Europe, etc. Though that may change.