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?
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.
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