Consumer complaint received 2018-02-01
Company: PHH Mortgage Services Corporation
State: MD
Product: Mortgage
Sub-product: VA mortgage
Issue: Trouble during payment process

Complaint:
I have a mortgage with PHH Mortgage Service that includes an escrow account to pay my insurance and taxes. ForXX/XX/XXXXI prepaid my taxes on XX/XX/XXXX for the amount of {$3300.00}. I reported this to PHH and faxed them a copy of the receipt and statement on XX/XX/XXXXper their request, to complete a re-evaluation of my escrow account. PHH does not dispute that I have prepaid the taxes, and that there are no property taxes due now until XX/XX/XXXX. 

By XX/XX/XXXXthere will be a water/sewer tax of {$230.00} due along with a water tax of {$140.00}. Both are paid from my escrow account. In XX/XX/XXXX there will be an insurance bill due of {$1400.00}. These total {$1800.00} for the 12 month escrow period of XX/XX/XXXX through XX/XX/XXXX as calculated by PHH. They do not dispute this. 

To pay the required amounts to cover those per 12 CFR part 1024 ( Regulation X ) 1024.17 Escrow accounts I would need to pay an escrow payment of {$150.00} per month, and the cushion/minimum balance should be no more than {$300.00}. 

PHH has sent me a statement saying that my minimum escrow payment is {$420.00} per month with a minimum cushion of {$850.00}. 

I explained to the tax expert, a customer service representative, and then a manager named XXXX XXXXXX/XX/XXXX( sp? ) that if I paid that amount, I would have a surplus of {$3300.00} by the end of XX/XX/XXXX the end of the 12 month calculation period. They do not dispute this and it is clearly shown on the escrow analysis they sent. 

They claim I must make those payments and have that surplus per XXXX ( sp? ) regulations. They did not explain the regulation but XXXX  and the other two people both kept saying it was due to those regulations. 

XXXX gave me the option of petitioning to be removed completely from my escrow requirement, or to continue to pay the excessive amounts and then request an off cycle escrow analysis after XX/XX/XXXXto get a refund of the excess amount built up by then. 

I do not want to be removed from my escrow requirement, I want PHH to continue to manage that as they should. I do not want to pay almost {$300.00} excess to PHH every month and then request a refund in XXXX and then another every few months until XX/XX/XXXX. I want to pay the proper amount for my escrow as defined in the CFR regulations. 

I fully understand that in XX/XX/XXXXthere will be a new analysis that will show that my escrow deposit has to increase back to over {$420.00} per month to cover the taxes due in XXXX and XX/XX/XXXX. There are no property taxes due until then though, and those are well over the 12 month calculation period. 

Please help explain to PHH that they are collecting far too much. Their own paperwork shows the surpluses and even the FAQ they sent says How did we calculate my new escrow payment? We list all possible disbursements or expenses such as property taxes or insurance premiums to be paid on your behalf for 12 months. We take the total and divide the amount by 12 payments. Total anticipated disbursements divided by 12 payments equals the monthly escrow payment. 

If that were true in this case it would match the CFR regulations, but {$1800.00} divided by 12 is {$150.00}, not the {$420.00} that PHH says is my required escrow deposit.

Company response to consumer: Closed with explanation