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Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 117370
Experience:  Licensed attorney practicing landlord-tenant, land use and other real estate law and litigation.
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Can a bank arbitrarily put funds in my escrow account

Customer Question

Can a bank arbitrarily put funds in my escrow account without telling me
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Law Educator, Esq. replied 1 year ago.

Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.

If you carefully read your mortgage agreement, you will see a clause in there that allows the lender to establish escrow at any time for necessary expenses that may occur during the year regarding the property that the loan is on. Escrow has to be used for the property, such as insurance, property taxes etc. It is not unlawful for them to establish such escrow and every mortgage contract I have read has a clause in there informing he borrower that such escrow may be established. Annually, they must provide an escrow statement informing the borrower where the escrow was used and how much is in the account. They cannot just take money and put it into escrow without being able to show the reason for doing so and how much is needed.

If they are doing so you are entitled to an accounting of the escrow and if they refuse you need to inform them in writing they are in breach of your mortgage contract and if they refuse to cure, you will file a complaint with the Attorney General for them improperly withholding escrow and will sue to recover any unnecessary funds being withheld in escrow.

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