I recently refinanced my mortgage with Bank of America and I have the following complaints to make regarding this refinance.
The bank misappropriated the tax and insurance escrow accounts on my former loan that was paid off. Loan covenants and HUD/RESPA regulations require prompt refund to borrower any funds held in escrow for taxes and insurance once the loan is paid off. The Bank violated these covenants and regulations by not refunding the funds. The bank instead made a principle reduction on the new refinanced loan for the amount of those escrow funds owed to me the borrower.
There are significant reasons why HUD regulations require that funds in escrows for tax and insurance be accounted separately and not be mingled with amounts due for principle and interest on mortgages. The bank is acting as agent for the payment of taxes and insurance only and has a fiduciary responsibility not to misuse those funds. The bank does not have the right to apply those funds in any other way.
The bank misrepresented and failed to disclose to the borrower its intent to apply escrow funds for taxes and insurance to make a principle reduction in the new refinanced loan. The HUD-1 Statement provided me at the time of loan signing clearly indicates that that the previous loan payoff charges do not include the tax and insurance escrows as a credit and consequently are not applied to the principle reduction on the new refinanced loan.
I ve been in contact with my loan officer and loan processing department at Bank of America but to no avail. They are unable or unwilling to refund my tax and insurance escrow balance as required by law.
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