Consumer complaint received 2020-05-27
Product: Mortgage — Conventional home mortgage
Issue: Closing on a mortgage — 
Company: HSBC NORTH AMERICA HOLDINGS INC. (AL)

Our loan with HSBC recently closed with incorrect property tax withholding going into escrow. We repeatedly asked for corrective action, even noting the RESPA violation, but HSBC refused to correct. As such, we are filing this RESPA violation complaint. 

Per the XXXX XXXX Tax Assessors website, Owner occupied property is assessed at 10 % of its fair market value. The property appraised at {$650000.00}. 10 % of this is {$65000.00}. This fact is not in dispute The XXXX XXXX millage rate is XXXX. This is published on the XXXX XXXX Tax Assessors website. It was also acknowledged to be true by XXXX XXXX, per the title company, in her attached email dated XX/XX/XXXX. The millage rate of XXXX is agreed upon by both HSBC and myself. This fact is not in dispute. 

10 months of property taxes were collected at closing. We agree that the collection of 10 months of taxes is reasonable. This fact is not in dispute. 

Given the three points above, expected taxes annually, without the homestead deduction are : $ XXXX {$6000.00}. For escrow purposes, this works out to $ XXXX {$500.00} per month. 

{$500.00} XXXX months = {$5000.00} to be collected at closing. Additionally, under RESPA, HSBC was permitted to collect XXXX of expected annual taxes as cushion. {$6000.00} projected annual tax XXXX XXXX = {$1000.00}. This cushion, plus 10 month of taxes equals {$6000.00} ( $ XXXX {$5000.00} ). Instead, {$9300.00} was collected at closing. This was a rate of {$930.00} per month vs the correct {$500.00} per month. This is a clear RESPA violation. 

In addition, HSBC collected this amount with malice. I raised these concerns on 5 different occasions, Please see attached emails as support. I even specifically noted the RESPA violation and asked that they correct, which they refused. 
1. XX/XX/XXXX email to XXXX XXXX, XXXX XXXX and XXXX XXXX 2. XX/XX/XXXX email to XXXX XXXX 3. XX/XX/XXXX email to XXXX XXXX 4. XX/XX/XXXX during recorded phone conversation with XXXX at XXXX pm central time 5. XX/XX/XXXX email to XXXX XXXX Additionally, on XX/XX/XXXX I filed my Homestead Exemption with the XXXX XXXX Tax Assessor for the XXXX tax year. XXXX XXXX in that office confirmed that the XXXX taxes due in XXXX would be based on land alone, since construction on the home did not begin until XX/XX/XXXX. This means withholding at closing is even further inflated. Property value is estimated to be approximately {$48000.00}. This puts the taxes due in XXXX at approximately {$440.00} for the whole year ( $ XXXX {$440.00} ), of which {$370.00} should have been collected at closing. 
We are requesting an immediate refund of overcollection for escrow, plus interest. This totals {$9000.00} plus interest. 

We are requesting that our mortgage payments be adjusted to reflect a monthly property tax escrow withholding of {$37.00} per month instead of {$930.00} per month through XXXX of XXXX. We understand that next year we will pay taxes on the full market value, minus our homestead exemption, and expect the escrow will go up accordingly in XXXX. However, current estimated taxes due in XX/XX/XXXX, with the homestead exemption, are projected to be {$5400.00} ( $ XXXX {$6000.00} homestead exemption ) XXXX {$5400.00}. This equals a monthly property tax escrow payment of {$450.00}. 

We also ask that all fines that are permitted under the law be assessed against HSBC. The fact that we raised this concern 5 separate times over a one month period and they proceeded to ignore our concerns, clearly indicates a disregard for the real estate laws in place to protect consumers like myself.