Consumer complaint received 2018-11-21
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — 
Company: STATE FARM BANK, FSB (MI)

On XX/XX/XXXX my wife and I closed on a conventional mortgage with State Farm Bank. Sometime shortly thereafter, their Escrow Dept wrongfully deposited the money entrusted to them ( intended to pay for our sod and sprinklers ) in my mortgage escrow account without my knowledge or consent. I still do not know if or how this could have possibly happened. On one of many calls to State Farm Bank, I was told that this massive escrow balance excess ( over {$20000.00} ) was because we were overestimating the annual taxes ( {$7500.00} ) to insure that there was enough of a cushion to pay taxes when fully assessed and due. We were told that amount plus {$4700.00} ( per our Closing Disclosure dated XX/XX/XXXX ) would give us more than enough to pay that responsibility. We were paying an additional {$690.00} per month as part of our monthly payment as well. Later, I made another inquiry about this bloated account and I made a written request that they drop my escrow account altogether since they clearly had it wrong and State Farm Bank refused to do that. However, they knew the account was badly  mismanaged and they mailed the overage to me even though they said they wouldn't. My wife and I didn't understand what they were doing but we knew that this was not right and we were very uncomfortable with the numerous different people we spoke to and the wide array of answers we received from employees of the call center. We felt the overage had been mishandled and it definitely was. Much later, on XX/XX/XXXX my wife, XXXX, sent a very specific letter to State Farm Bank with a check sufficient to pay our summer taxes and she clearly detailed for them to apply our included check for {$6500.00} to pay our taxes and not to the principle. Since we had zero faith in their accounting skills at this point XXXX was VERY specific yet they misappropriated that money and applied it to the principle in direct defiance of our included written instruction. Subsequently, I made additional calls and relived our story repeatedly as they will not allow you to speak to the same person because their calls are handled by a call center. After multiple painful conversations, State Farm Bank finally did the audit that I had previously requested. Now they are sending differing amounts that we are " short '' even though we just paid the taxes so they are not due until this time next year. Our tax escrow should be $ XXXXmo however State Farm is forcing us to pay $ XXXX/mo as an adjusted escrow requirement. The major issue at hand is that this changes our payment for {$2700.00} ( as agreed ) to {$3400.00} which we can not pay. Please help us. We've made several attempts to correct this and we are getting nowhere. Our greatest fear is that their errors are going to impact our credit rating by their mismanagement of funds that were entrusted to them. This is the second time State Farm Bank has made a banking error in excess of {$10000.00} of our money. Last time was an error in a transfer from my checking account. I transferred a {$10000.00} loan to a State Farm Sales Leader who needed the money to close on his home loan with State Farm Bank. Somehow State Farm Bank admitted screwing it up this transfer when they sent the transfer twice! For a total of {$20000.00}. I have documentation from State Farm Bank. How does this happen? Who do they have handling these huge sums of money? It's very frightening to us and it needs to be investigated. Thank you.