We currently have a 30-year fixed VA mortgage that was sold to Citimortgage, as my husband is an army veteran. We purchased our home in June, so this mortgage is less than a year old. We are first-time homeowners and very proud. In April we received our monthly statement from Citimortgage, as we do every month. On this statement it stated that our monthly payments would increase by $50 every month starting in June. We are a simple family on a tight budget, like most modest American families. We buy the necessities and always pay what we owe.
We telephoned Citimortgage's customer service department to find out why they were raising our monthly payments. They told us this was based on a projected tax increase for our local area and that we needed to contact our local tax collector's office for details. We immediately called the local tax collector's office and asked many questions. The tax collector's office laughed and told us mortgage companies "pass the buck" to them all the time. The woman was extremely nice and stated our taxes would never increase in the middle of the year. She stated that taxes are never the same each year (which is understandable), but then stated the amount the mortgage company was trying to charge us based on a projection was absurd. The taxes for this rural area have never risen that much in a single year ever! This so-called "projected" increase equals $600 more per year. We do not have new construction, we have not passed any new levies, and as a matter of fact the property values in this area have decreased!
We then contacted Citimortgage again to explain that this must be a mistake, as we had just gotten off the phone with the tax collector's office. They told us this was not a mistake and we had to pay the extra $50 or our payment would be considered late. We would incur late fees, bad marks on our credit report, and possible foreclosure. Well, this just set my husband off. He asked, "How can you charge for something you have no hard facts to back up? I project my taxes will go down because lord knows property values have. Does this mean I can decrease my payment to you because I project a decrease in taxable value?" He then explained that if we owed it we would gladly pay it, but we don't. How can you charge someone something that they technically don't owe? We don't send an extra $50 to the electric company every month because we project the cost of energy will rise in 5 months. This is ridiculous.
We contacted the VA to try to get some help on what to do. Well, that was a waste of time, because the VA does not have any authority or regulations over the escrow accounts that mortgage companies service. So here we go again... The VA (government) guarantees and bails out the big banks if a consumer defaults, but has no ability to help the consumer when these big banks strong-arm the consumer, and the kicker is that it is mandatory for you to have an escrow account when you receive a VA loan. They make you have an escrow account as part of their guidelines but cannot help you when something is wrong. We have never been late on our payments and firmly believe that if we owe it we will pay it, but we don't owe it according to the local tax collector's office.
Citimortgage then said, "Well, it's only $50 a month, and if you overpay we will just refund the money." Oh, that makes me feel better. Only $50? That's almost a tank of gas these days, and it does add up! This would create a hardship not only for us but, I am sure, for thousands of people across the US who are already struggling, and this is all based on a projection that has absolutely no basis or facts to back it up.
Citimortgage then told us, "You can fax a letter requesting a re-evaluation, but it probably would not change because this is based on a projection and not hard numbers." Again I ask everyone, "How can you legally charge someone something they don't owe?" This is the problem with these banks. They make up their own rules and guidelines, and we all suffer. This just is not right. I would so like to sue the pants off them, but like I said, we are a modest family without a whole lot of expendable income.
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