MG in New York said: “I have been paying mortgage payments to HSBC since 2002 when I refinanced my home mortgage. In early 2008, the bank sent me a notice that my property tax increases had caused the bank to require a lump sum payment or an increase in my monthly payments. They requested a lump sum “shortfall” payment of $1,240 in order to balance my escrow account. I sent them the check for the $1,240. The very next mortgage statement was received, acknowledging the lump sum payment as my “escrow shortage payment” —but now asking for an additional $69.05 per month. This changed my payment from $2,634.21 to $2,703.26.
I called the bank to ask why, if I just sent them the appropriate shortfall payment, they needed yet another increase to my monthly payment. I was told that they needed this increase “just in case the taxes go up next year”. I told them I would agree to pay the shortage – if such shortage ever actually came about next year—just as I had previously done with my check for $1,240. However, I objected to them to trying to collect, in advance, a sum that wasn’t yet owed by them to pay for taxes that had yet to be increased.
I have received a notice that my last payment was short $69.05 and that because of this, they have not applied my entire last payment of $2,634.21.
I spoke to HSBC on several occasions and have yet to get an explanation of why they would be entitled to demand this monthly increase. No explanation beyond “we get it now in case your taxes go up next year” has been provided. I have read through my mortgage papers including “Initial Escrow Account Disclosure Statement”, the “Real Property Insurance Escrow Account Disclosure” and the Mortgage itself. Although the Mortgage does indicate the Lenders right to escrow monies for the upcoming year, no where does it state that the bank can collect beyond a year of escrow funds. I have yet to find a clause pertaining to this “speculative tax increase advance”. I am, however, hesitant to avoid payment of this additional fee as the bank will undoubtedly claim I have defaulted on my loan commitment.
I feel that this is an abuse by HSBC and I am asking my elected representatives for assistance. Has this sort of abuse been discussed on your web site?”
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