Burlington, IA asked in Real Estate Law and Banking for Iowa

Q: My bank removed our home owners insurance from our eacrow without informing us while doing year calcuations.

They also informed us when we asked about a larger sum back than usual that it was just over estimated taxes during the previous calculation.

They now want us to pay monthly on insurance and pay more into the escrow on a new signed agreement.

Is this legal since our previous agreement said they would pay it from the escrow we are paying into?

Related Topics:
1 Lawyer Answer
John Michael Frick
John Michael Frick
  • Business Law Lawyer
  • Frisco, TX

A: If you signed the "new signed agreement," you are most likely bound by its terms, even if they are different from the previous agreement you had with your bank.

If you did not sign the new agreement, your bank is most likely bound by the terms of the previous agreement you had with the bank.

A bank's mistake in making an escrow reconciliation calculation does not somehow relieve you of whatever obligation you may have to make escrow deposits under whatever agreement both you and your bank have signed. Typically, when such a mistake is made, you can either send the money wrongfully sent to you back to be deposited into the escrow account or make larger monthly escrow deposits for a time in order to make up any shortfall.

Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.