Consumer complaint received 2019-10-16
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — 
Company: CITIZENS FINANCIAL GROUP, INC. (RI)

Citizens One Home Loans, a subsidiary of Citizens Bank, N.A. ( the bank ), services our conventional mortgage loan. The loan includes a property tax escrow. The town allows quarterly payments, and the bank had always paid the tax payments quarterly. On XX/XX/XXXX, the bank sent a letter stating it would begin paying the property taxes annually for XXXX, rather than quarterly, to get the 2 % discount that the town offers for paying in full. It noted the change could result in an escrow shortage, which if we did not pay in full, the bank would spread over 24 months in the monthly payment. The letter did not disclose how the escrow account payments would change, or if there would be a shortage. In addition, the letter did not give a choice to waive the 2 % discount, and the possible higher escrow shortage, and stay on the quarterly payment cycle with the town taxes. Around XX/XX/XXXX, the bank sent the annual RESPA Annual Escrow Account Disclosure Statement. The Account Projection table showed there would be the annual tax payment, and that there was now a {$4000.00} escrow shortage. If we did not pay the shortage in full now, the monthly payment for the next 12 months would cover the shortage increasing our total monthly payment {$330.00}. During a phone call with the Tax Dept, the  representative said that it seemed like an error and they would review the issue and contact me. On XX/XX/XXXX, we received the same RESPA disclosure the bank sent in XX/XX/XXXX. The customer representative in the Tax Dept told me that there was no choice in the matter, although they could spread the escrow shortage over a longer period if the payment was not affordable. After checking with her management, she confirmed that we had no choice and the bank would pay the taxes annually. 1. The bank does not disclose the amount of escrow shortage and payment increases when it decides to go to the annual payment cycle instead of the usual quarterly cycle. 2. The bank does not provide the homeowner an option. 3. The bank disclosed that the shortage would be payable over 24 months when the Annual Escrow Disclosure said it would be 12 months, resulting in the substantively increased payment compared with a 24 month collection ; and 4. Customer Service confirmed today that the servicing system is in fact scheduled to collect the shortage over 12 months, not 24. This is an Unfair Practice because we have no choice in the repayment terms of the taxes on our property and we had no information or ability to change how much the escrow would collect to prevent the shortages. In addition, this is a Deceptive Practice, because the XXXX letter advising of the change did not provide the information we needed, it stated it would collect the shortage over 24 months when it would in fact collect it over 12 months. The bank should provide more information when it gives notice of the change in its practice to pay the taxes annually. In addition and most importantly, the bank should offer homeowners the option to pay the 2 %, or remain on the quarterly cycle and lower the escrow shortage, because to do so would be best suited for their budget.