Consumer complaint received 2024-07-29
Product: Mortgage — Conventional home mortgage
Issue: Closing on a mortgage — Setting up an escrow account for taxes and insurance
Company: LD Holdings Group, LLC (NC)

I currently hold a refinance mortgage with Loan Depot LLC. I refinanced with a closing date of XX/XX/XXXX Prior to the refinance, all our property taxes were current as the previous mortgage company never failed to pay our taxes properly from escrow. Loan Depot failed to correctly pay all the taxes at closing and every year since that time. My property consists of 2 parcels of land. Loan Depot was aware of this and both parcels are listed on all the loan documents. My wife just discovered on XX/XX/XXXXthat the reason for the tax issues for our property is because Loan Depot failed to get one of the tax certificates at closing, which is the parcel of land the house sits on. This error at closing caused our house to have tax sale proceedings initiated. During the course of this loan, Loan Depot has committed the following offenses:

	Ignored the email my wife sent prior to closing telling them of the escrow shortage and incorrect loan estimate and took no action
	Failed to get the tax certificate for on of the parcel
	Failed to properly pay the XXXX  taxes at closing
	Failed to find and accurately fix the problem during a XXXX investigation into the XXXX  delinquent tax notice.
	Took actions that intentionally recreated an escrow shortage
	Failed to accurately pay XXXX taxes, ignored the delinquent tax notice and took no action
	Failed to accurately pay XXXX  taxes, ignored the delinquent tax notice and took no action
	Twice refused to keep the extra money we were sending to escrow to pay the taxes they were supposed to pay
	Paid the first half of XXXX  taxes past the deadline
	Incorrectly and repeatedly informed us our taxes were paid in full when they were not
	Took almost a full month for Loan Depot to pay the back taxes, failing to stop the county from initiating tax sale proceedings
	Took all of our escrow balance (XXXX) for XXXX  expenses, to pay the back taxes they failed to pay because of their closing error
	Set our escrow account to a negative XXXX to pay for the back taxes they failed to pay due to their closing error
	Has more than doubled our monthly mortgage payment to cover 3 years of taxes (XXXX XXXX XXXX XXXX) in 12 months due to their closing error
	Attempted, in writing, to blame the previous mortgage company for failing to pay XXXX  taxes prior to closing and admitted to not scheduling a tax payment at closing
	Loan Depot was informed on XXXX  of the closing error. They were provided 5 business days to respond to the notification of the closing error. Loan Depot has not responded at all.

Attached is the Tax and Insurance Information Sheet and the Tax Certificate that verifies the closing error. The following are the details of what transpired for the last three years. The correspondence is between Loan Depot and my wife as she is the one that takes care of the monthly bills.

Prior to Closing: refinance closing dateXX/XX/XXXX

My wife informed Loan Depot prior to closing, in writing to ____, that the escrow account had to be at least XXXX XXXXo have enough money to cover insurance and taxes. Loan Depot also knew they were supplying a loan for two parcels over XXXX sq ft., a 4-bedroom home over XXXX  sq ft and annual insurance of XXXX. A XXXX escrow payment didnt stand out to anyone even after having it brought to their attention. Loan Depot failed to act and changed nothing.

Loan Depot knew of both parcels so paying extra money into the escrow account will usually fix an escrow shortage. The tax certificate wasnt in our loan documents. We had no way of knowing they completely failed to get the other tax certificate. Regardless, they were notified prior to closing and failed to act. Their error is what caused our extra payments to the escrow to fail in fixing the problem. XXXX XXXX

We started to get XXXX  delinquent tax notices for parcel ______ in the amount of XXXX  (or about). My wife called and emailed Loan Depot and much later we finally got someone to response. I believe her name was ____, she was provided a copy of the original email to _____ informing them of the escrow shortage prior to closing. She put together a team to determine what happened and why the XXXX  taxes were not paid at closing. We were never informed of why the taxes werent paid at closing. We were just told that the XXXX  taxes were now paid (in XXXX of XXXX, I believe) and the monthly mortgage payment had been adjusted to ensure that enough money was going to be collected for future taxes and insurance.

How did they not find the error at that time? They had a delinquent notice for a parcel number associated with the loan but not showing up in their tax department, how did they fail in fixing the issue? They have not provided an answer.

If their tax department did not find that there was a missing parcel # and the other parcels taxes were paid, what taxes did they think they were paying? They have not provided an answer.

Did they make us pay for their closing error regarding the XXXX  taxes?

XXXX XXXX XXXX 

Loan Depot sent us a check for $XXXX. They reduced our monthly mortgage payment back down to an insufficient amount to cover escrow. They sent us back all the tax money we were trying so hard to get them to keep and pay the taxes. They literally recreated the situation all over again. We started sending over a $XXXX  extra to escrow each month. XXXX XXXX

We received a delinquent tax notice for XXXX. The XXXX  taxes for the missing parcel were XXXX We have always paid our property taxes so we were not aware the tax office only sends three notices and then stops sending them. When we called Loan Depot about the latest delinquency notice, they told us the taxes were paid in full. They completely ignored the delinquent notice. They asked no questions about the notice, not the year, the amount or the parcel number. My wife, was very frustrated by this time, she asked the lady from the tax department: are you telling me it is customary for people to receive delinquent tax notices if their taxes are paid in full? The answer received was: we pay your taxes in arrears and your taxes are paid in full. By this time, we had put a good bit of extra money in the escrow account. The notices stopped coming and with Loan Depot saying our taxes were paid in full, we had no reason to believe that we should go to the tax office to pay our taxes. 

XXXX XXXX XXXX

We received a check from Loan Depot stating that it was for overpayment into the escrow account. The check was only for XXXX. After spending all of XXXX putting over a XXXX extra into the escrow account and only getting XXXX back, it really appeared as though they paid all our taxes. 

Now that we know they didnt, did they actually handle our escrow account correctly? With the one parcel and insurance correctly included in the escrow to begin with, what happened to all the extra money we paid into the escrow account throughout XXXX? Did they make another mistake when they lowered the mortgage payment in XXXX XXXX XXXX, further shorting the escrow account?

XXXX XXXX:

We received a delinquent tax notice for XXXX  taxes. Same thing this year, your taxes are paid in full.

XXXX XXXX XXXX

My wife went to the tax office to try to see if they could tell her what was going on. It was then, in comparing our documents with theirs, that she had discovered that Loan Depot was only paying taxes for the small wooded lot behind the garage, parcel # ____. After creating a team in XXXX  to investigate this and paying the XXXX  taxes for the missing parcel, they failed to pay the property taxes for XXXX  or XXXX. My wife was informed at that time if the past taxes werent paid by XXXX XXXX XXXX that they would put our house up for a sheriff sale for taxes owed. 

My wife called Loan Depot the same day, because she was recording the call also, they put a manager on the phone. He informed her they would fix the issue and that they were going to have to raise our mortgage to pay the back taxes which was over XXXX But, because it is such a large amount, even though they dont like to, maybe we might be able to spread it over 24 months. She informed him at that time: that is where we have a problem. We tried everything to get them to pay the taxes and do something about the delinquent notices, only to be ignored. They created a team to investigate this and still failed to fix it correctly. This went on to the point of having tax sale proceedings initiated. 

XXXX XXXX XXXX (attached email)

We never heard from that manager again. It was sent down to a customer service representative to deal with. We received an email from the representative. She was simply informing us that they were looking into the delinquent tax issue and that she would follow up on or before XXXX XXXX XXXX 

Why, when a customer calls and tells them they are about to lose their house to a tax sale, does that not warrant a level of manager communication, unless, of course you are recording their employees? Someone should have been trying to figure out what went wrong to begin with.

XXXX XXXX XXXX: (attached email)

The representative did respond on this day as stated, however, it was the last day to pay the back taxes before the tax sale was to be initiated. The XXXX XXXX XXXX  was a Monday. The representatives communication was simply to tell us that they have attempted to get in touch with the tax claim bureau but hadnt been successful. Our house was to be put up for a tax sale and it took Loan Depot 7 full business days to tell us they couldnt reach the tax office. My wife had talked to the tax office three times in those 7 business days and had no problem, so she sent them the information. XXXX XXXX XXXX: (attached email)

We received an email from the representative stating that the back taxes had been paid, the penalties did not come from our escrow account and an analysis of the escrow account has been ran. We were to review the attachments and let them know if we had any questions. Also, in those documents was the notification that our mortgage is more than doubling. From XXXX XXXX XXXX beginning XXXX XXXX XXXX.

It took Loan Depot, almost a full month, from XXXX XXXX XXXX XXXX XXXX XXXX XXXX to pay the back taxes on a house that was going to have a tax sale initiated. They were informed on the XXXX XXXX XXXX that the deadline to pay the back taxes was XXXX XXXX XXXX they placed no urgency on this matter. I work for the ____. My _____ is aware that I work for the ____. Because Loan Depot ignored the deadline date, the county did in fact send an envelope with Notice of Public Tax Sale clearly printed on the front that I had to sign for. To my complete mortification other employees saw this and believe that I am to lose property because I dont pay my property taxes. We pay our bills, especially our property taxes. We have very good and excellent credit ratings. Their action, or lack thereof, damaged our name in the eyes of other employees, the tax claim bureau and the court system that issued the public tax sale notice.

The same evening, we responded. The format they use to tell customers what they have done in a situation like this does not provide the details required to verify actions taken. They show on the account history page the total dollar amount paid and that it is for delinquent taxes or taxes. Loan Depot does not provide a breakdown of what year each amount is for, how much of it was penalty or taxes, etc The online version of our account activity history does not show any of the transactions they made except the advancement to the escrow account.  

We also asked several questions. How do we know it wont happen again? How did it happen? Is the loan properly secured, is anyone looking at this? Why is there a missing parcel number? We also asked for someone we can work with to try to figure this out. XXXX XXXX XXXX (email attached)

In short, the representative responded with an explanation of how the previous lender should have sent us a check from escrow after they closed our account and we should ask them for the money if we hadnt received it. She attached the Tax and Insurance Information Sheet and the Tax Certificate documents. She pointed out that the information on the tax certificate is what they used for our loan and that it indicates the XXXX  taxes were XXXX Also, that because the tax was due in XXXX the same month as the closing, they simply didnt schedule a tax payment at closing because the previous lender should have paid it.

This is the first time we were seeing the tax certificate, it was not in our copy of the loan documents. We immediately checked to make sure that both parcel numbers were on both documents. The tax and insurance information sheet has both parcels listed but the tax certificate is clearly only for one parcel. They knew there were two parcel of land and failed to get the tax certificate for the parcel the house sits on, hence, having tax sale proceedings initiated against us. 

We responded the same evening (email attached). We pointed out everything we had done to try and get this fixed with them for the last three years. Loan Depot was provided the proof in that email that they had committed a closing error and it has been radio silence for over 5 full business days. We have not received so much as a confirmation that they received our email. Not only were they negligent in performing their duties, but they are continuing to choose to be negligent in their avoidance of accepting responsibility.

At this point, it is our belief that Loan Depot has already caused us harm by failing to take care of this prior to closing, during the XXXX  investigation and by the tax sale deadline of XXXX XXXX XXXX. They have wasted countless hours of our time and created a great deal of stress. They failed to act causing extreme embarrassment at my place of employment. The have drained all of our escrow funds and more than doubled our mortgage payment to pay for three years of property taxes in the next 12 months, because of an error they created at closing. Then they attempted to blame the previous lender for it. 

Our property taxes have always been paid in escrow and we have never had any issues. That is supposed to be the entire purpose behind escrow accounts, peace of mind and security. We have had none of that with Loan Depot.