Are You Able to Collect Interest Through a Property Tax Escrow Account?

Mortgage lenders and loan servicers may owe homeowners interest on the property tax escrow accounts they require the homeowner to maintain as part of their mortgage agreements. However, some mortgage lenders and servicers may not be paying the interest they owe on these property tax escrow accounts.

Are you a mortgage borrower in one of the 14 states involved in this investigation? You may not have been paid the interest you’re owed for the money in your property tax escrow account. Joining a class action investigation could help you gain the compensation you’re owed.

Property Tax Escrow Accounts

Essentially, an escrow account is held by a third party while a transaction between two other parties is taking place in order to ensure that all contractual obligations are fulfilled before the money officially changes hands.

Escrow accounts can be used for a number of kinds of transactions. Escrow accounts can hold funds intended for mortgage payments, property taxes and insurance payments. Homeowners pay property taxes and insurance payments to a mortgage lender or servicer in advance of when they’re due, and the bank then holds that money in a property tax escrow account until the property tax or insurance premium is actually due.

Interest on Property Tax Escrow Services

Some homeowners may not be receiving interest payments for the property tax escrow accounts they are required to maintain. An escrow account allows the bank to collect one-twelfth of your annual property tax total in advance. Despite this, some mortgage lenders and loan servicers may be ignoring the law regarding escrow account interest.

Indeed, though most states do not require mortgage lenders and servicers to pay interest on an escrow account, at least 14 states have laws that require this interest to be paid if the property tax escrow account is required.

A recent decision by the Ninth Circuit Court in California may be relevant to New York as well. The court found in a class action against Bank of America that customers were denied interest the bank should have paid on accounts using Bank of America escrow services, according to California consumer law. The court found that complying with this state law of paying interest on escrow accounts would not interfere with its banking powers.

“No legal authority establishes that state escrow interest laws prevent or significantly interfere with the exercises of national bank powers and Congress itself, in enacting Dodd-Frank, has indicated that they do not,” read the opinion by one of the judges, U.S. Circuit Judge Jacqueline H. Nguyen.

Filing a Property Tax Escrow Interest Lawsuit

Because of the Ninth Circuit Court’s decision, Bank of America will now face a 2014 lawsuit from one California homeowner seeking interest on an escrow account—and this banking giant may not be the only one facing litigation.

If you live in one of the 14 states listed on our investigation page and you paid money into a property tax escrow account to pre-pay your property taxes or insurance, but were not paid interest by the mortgage lender on these escrow funds, you may be eligible to join this property tax escrow account lawsuit investigation.

Join a Free Mortgage Escrow Account Class Action Lawsuit Investigation

Mortgage borrowers in certain states whose lenders required them to pre-pay their property taxes or property insurance through an escrow account and who did not receive interest on those escrowed funds may qualify to join this mortgage escrow account class action lawsuit investigation.

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