Are Banks Double-Billing Mortgage Escrow Fees From Troubled Homeowners During Bankruptcy Proceedings?

Free Banks Double-Billing Claim Evaluation

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Federal investigators are looking into allegations that banks have wrongly pocketed tens of millions of dollars from troubled homeowners by double-billing for mortgage escrow fees in bankruptcy proceedings, the NY Post reported on January 1, 2012. The federal investigators were informed of the alleged practice by metro area bankruptcy lawyers who said their cases specifically involved Wells Fargo and GMAC Mortgage, but most likely by other banks as well.

Many homeowners opt to pay part of their property taxes and homeowners insurance with their mortgage every month. The funds are then put into an escrow account and used to periodically pay the taxes and insurance. But after falling behind on a few payments, troubled borrowers in Chapter 13 often find that their bank or mortgage servicer tries to collect twice on the escrow funds — once as part of the overall mortgage payment, and again as a separate “escrow shortage” charge.

The average double charge is about $2,000, forensic accountant Jay Patterson of Full Disclosure in Arkansas told the NY Post.

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Andrei Rado, Esq.
Milberg LLP
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New York, NY 10119-0165
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Email: contactus@milberg.com

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