Consumer complaint received 2019-07-08
Company: PNC Bank N.A.
State: PA
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process

Complaint:
On XX/XX/XXXX, we closed on a mortgage for a townhome. The mortgage was provided by PNC Mortgage Company. During the mortgage shopping process, we had been offered the option of having our property taxes escrowed for convenience. No financial benefit was associated with this decision. We chose to have PNC escrow our taxes. 

Our XXXX tax payment to our locality was submitted late by PNC, resulting in penalties ( loss of discount ) on the tax payment. PNC reimbursed us for the penalties. However, the experience made us uneasy with the convenience of having PNC handle our property tax payments. 

We are fortunate to have sufficient financial strength that we can confidently handle the tax payments on our own, and do not require escrow services. Subsequent to our experience, we requested on XX/XX/XXXX, to eliminate the escrow ( an escrow waiver ) and take over our tax payments. PNC reviewed our case and approved the waiver, as we do not pose a financial risk to the mortgage. A copy of PNCs response is attached. 

We were extremely surprised to find that the fee to waive our escrow was going to be {$1500.00}. This amount is neither cost-based ( actually, PNCs costs go down if they do not need to administer an escrow ) nor risk-based, as our financial ability was not a consideration in creating the escrow ( and was optional ). The fee amount was not present on our first mortgage statement ( attached ). 

We have had multiple exchanges with PNC regarding the charge. I would summarize their response as : 1. Our initial escrow account disclosure statement, signed on XX/XX/XXXX at close, states that you may be required to pay a fee when closing all or a portion of your escrow amount. 

2. Later mortgage statements ( after the first ) showed the escrow waiver fee of 0.25 %. There was no notice of the addition of this fee ( in small font ). Both the first statement and a later statement are provided for comparison. 

3. This has always been their policy and they have no ability to modify it based on individual circumstances. 

We have two core complaints which we STILL have not been able to get PNC to address, and seek your assistance : 1. The level of this fee is arbitrary, non-cost based, and non-risk based. While we acknowledge that for some mortgagees, the waiver of an escrow increases the risk to the mortgage holder, that is not the situation in this case. We have had a 20 year financial relationship with PNC and have substantial financial reserves at this institution. While the fee they are charging is now at {$1500.00} why not {$5000.00}, or {$20000.00}? There does not appear to be any constraint on PNC to apply reasonable fees post-close. 

2. The existence of, and level of, the fee was inadequately disclosed. The purpose of the Escrow Disclosure Statement is to, obviously, disclose key facts about the escrow. However, this statement neither confirms that a fee is always charged to waive an escrow, nor does it mention the actual amount. In addition, our first mortgage statement ( which, of course, is the one most carefully scrutinized ) also omitted the fee. 

We would appreciate an actual response to these two points.

Company response to consumer: Closed with explanation