Mortgage Escrow Account Holders May Be Owed Thousands in Unpaid Interest

Consumers in numerous states who have a mortgage escrow account may be owed money under state laws which require lenders to pay interest on such accounts.

Individuals who have a mortgage escrow account may be owed interest on their accounts under some states’ laws. Some states require lenders to pay interest into an escrow account, and these requirements are often not preempted by federal law.

When issuing a mortgage, some lenders will also issue their consumers a mortgage escrow account. Monthly mortgage payments often include allowances for property taxes and home insurance, and money to pay these costs can be held in a mortgage escrow account until it is time to pay taxes or premiums.

However, new allegations suggest that mortgage lenders may be avoiding paying interest on mortgage escrow accounts in violation of state laws. Some states, such as New York, have laws in place requiring lenders to pay interest on a mortgage escrow account. Other laws dictate the minimum interest requirements and other regulations.

To circumvent these laws, many financial institutions claim that the National Bank Act preempts state laws. The National Bank Act created the national currency, established the national bank system, and gave banks broad preemption protections.

However, a recent decision by the Ninth Circuit Court of Appeals may put a stop to this argument. The court ruled in a Bank of America lawsuit that banks are required to pay interest under California state laws, which are not preempted by the National Bank Act.

Although the Treasury Department’s Office of the Comptroller of the Currency (OCC) has allowed the act to preempt state laws for years, the Ninth Circuit cited the Dodd-Frank Act to oppose this decision. The Dodd-Frank Act states that the National Bank Act only preempts state laws when those laws “prevent[s] or significantly interfere[s] with the exercise by the national bank of its powers”.

The Ninth Circuit ruling is based on California law, but it may also benefit homeowners in other states with similar laws. Due to these changes in the legal climate, more and more consumers may be eligible to take legal action against their lenders due to unfair mortgage escrow account practices.

You may be eligible to recover unpaid interest on an mortgage escrow account if the following applies to you:

• Your lender requires you to pay money into a mortgage escrow account for expenses such as property taxes and home insurance.
• Your lender did not pay interest on funds in a mortgage escrow account.
• You are from an eligible state. Eligible states include: California, Connecticut, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New York, Oregon, Rhode Island, Utah, Vermont, and Wisconsin.

If you meet all three criteria listed above, you may qualify to take legal action against your lender and recover unpaid mortgage escrow account mortgage. Lawsuits and class action lawsuits have already been filed against numerous lenders including Bank of America and Nationstar. Eligible consumers may be able to join a preexisting complaint or file their own, based on individual circumstances. An experienced mortgage escrow account attorney can evaluate your case and determine your best course of action.

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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