Performance Boats Forum banner

calling all mortgage people> did HSBC screw me?

1K views 12 replies 7 participants last post by  jxr02 
#1 ·
I closed on a refi 60 days ago. the old loan was with HSBC and the new loan was with HSBC. HSBC used my old escrow account (over $3k) to
reduce the loan amount without my knowledge. I had no clue. Even the closing atty told me I would be get my escrow refund. So basically
this refi cost my three grand more out of pocket than I was told. Is this kosher? How can a bank use an escrow account (look up the definition for escrow) to prepay a loan?

To add insult to injury, they made me still come up with the prepaids for the new escrow account. should I feel as screwed as I do?

Talk about financial transparency!
 
#2 ·
HMMMMMM....sounds like the FIRST thing you should be doing a calling the person that did your refi.

The closing of your old escrow acct, and having to place reserves into the new escrow account is normal. Have also seen old escrow balances been used to reduce the customers payoff. BUT you "should have" been aware of this. This person or company NEVER said anything about your payoff balances...ever ????
 
#3 ·
HMMMMMM....sounds like the FIRST thing you should be doing a calling the person that did your refi.

The closing of your old escrow acct, and having to place reserves into the new escrow account is normal. Have also seen old escrow balances been used to reduce the customers payoff. BUT you "should have" been aware of this. This person or company NEVER said anything about your payoff balances...ever ????
No, they did not, and I did not notice the difference from the origional 1003 at closing because I was not required to write a check. here is my email to the closing agent sent this morning:

Laura,

As a primary borrower for this loan, I can't tell you how extremely upsetting this situation, and your response to this situation are to me.

Before I make any deciscions about my next course of action, I want to get some clarification on the following:

It apppears that the lender reduced the loan amount on 7/23/08, the day of closing, is that correct?

In the closing instructions I see that the loan amount is different than the loan amount on our 1003 (loan app) but don't see where our escrow account is mentioned at all. Did I miss something?

When the loan amount is reduced by the lender prior to closing is there anyone resposible for informing the borrower that the lender has changed the loan amount?

When the loan amount is reduced by the lender is the borrower required to provide consent to changes in that loan amount?

When the loan amount was reduced why were we not given the option to provide the monies required at closing, rather than the escrow account balance being used without our knowledge?

Is a borrower not required to provide consent when monies in escrow are used for purposes other than its intent (i.e. property taxes and hazard insurance)?



Thank you for your response in advance,
 
#4 ·
Hound the LO, that's about the only thing you can do. Your 3-day right of recision is up, and you signed the 1003 (I'm assuming this) with the new numbers on it.

Your money isn't gone, just not where you wanted it, correct? So, here's the thing - is it worth your time and stress to go after them? Only you can make that call.
 
#7 ·
Was this a cash out refi or rate and term? If it was a rate and term, the lender according to Fannie/Freddie guidelines has to keep the cash in hand to you under $2000. I am still confused about why they simply didn't refund the escrow to you, but it may be a lender specific guideline. That would be my guess.
 
#10 ·
Was this a cash out refi or rate and term? If it was a rate and term, the lender according to Fannie/Freddie guidelines has to keep the cash in hand to you under $2000. I am still confused about why they simply didn't refund the escrow to you, but it may be a lender specific guideline. That would be my guess.
It was a rate and term. no cash out. My LO is a DA (dumb a$$), said he doesn't know why they did that.

I have however decided to chase my tail somewhere else. lesson learned, moving on.

Thanks for everyone's insight though.
 
#8 ·
"reduce the loan amount without my knowledge."
Just caught this. Did they reduce your NEW loan amount (which it is im assuming) or the PAY-OFF loan amount? Like T-bag-Wagon said...ifs its a RATE AND Term refi you can not get more then 2k cah back. IF the LO didnt originaly take your old escrow account into his calc's, they would have to lower your new loan amount to stay with in the 2k limit. ???
 
#11 ·
"reduce the loan amount without my knowledge."
Just caught this. Did they reduce your NEW loan amount (which it is im assuming) or the PAY-OFF loan amount? Like T-bag-Wagon said...ifs its a RATE AND Term refi you can not get more then 2k cah back. IF the LO didnt originaly take your old escrow account into his calc's, they would have to lower your new loan amount to stay with in the 2k limit. ???
They adjusted the NEW loan amount downward. So I missed the opp'ty to finance an additional $3k for 30 years with a tax deductable interest rate. would have rather had that monoey in hand and put it to work somewhere else.
 
#9 ·
The lender should have applied the money to your payoff thus reducing your payoff. You should have gotten a copy of the demand for payoff from old loan and it would show a credit to your loan balance from your escrow account. If the LO didn't figure that in originally, your loan balance on new loan should be lower since your payoff was lower.
 
#12 ·
Just a thought with all of this: why have an escrow account at all? Property tax is due twice a year and cannot be pre-paid and insurance is usually paod once a year. With an escrow account, all they do is take that total annual cost divided by 12 and then dump that monthly payment you make into a savings account (of their own) until the tax or insurance bill is due....oh and they usually charge you a FEE for this! You know how much your prop. tax and insurance is, why not put that monthly amount into your own savings account and keep any interest earned instead of the escrow company? I have been doing this for years and just put the funds into an online savings account so it stays separate from our regular funds and earns a little more interest. Just my .02
 
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Top