Mortgage & Escrow

More than 45% of Clark County home owners pay their property taxes through escrow with their mortgage company, bank, or other lending institutions. When such an arrangement is made, the taxpayer is still responsible for ensuring that the tax payment is made on-time. 

Below are commonly asked questions about mortgage companies and escrow accounts.

Yes.  Usually at closing, the buyer and lender agree to setup an escrow account for that purpose (RCW 84.56.330).

Yes.  Sometimes both the company and the homeowner pay the taxes.  If you are not sure whether you are paying taxes through your mortgage escrow, call the lender.  Do not double pay.  A company also may fail to pay the taxes or they may pay on the wrong property account number – something that happens to taxpayers each year in Clark County.  For these reasons, you should check the taxes tab on the Clark County GIS Property Information Center to confirm that the company has made a payment after each installment is due.

Taxes along with interest and penalty are still due.  If payment is delayed for three years, the property will be foreclosed on and sold at a public auction.  Remember:  If you are current on your escrow and the company fails to pay on-time or on the correct property account number, state and federal laws require the lender to pay any late penalties or fees.  You should also be reimbursed by the company for any money taken from your escrow that is paid on the wrong property account number. 

Homeowners must stay aware of their property tax payment status by checking their account online or staying in contact with the mortgage company.  When a tax installment is due, a homeowner should check with their mortgage company to ensure the right tax account is being paid. 

If your mortgage company was supposed to pay your Clark County real estate taxes from escrow and you received a real estate tax delinquency notice, it is most likely that:

  • No tax payment had been received at the time the delinquency notice was printed.
  • A tax payment was submitted in a way or format that could not be processed.
  • The mortgage company paid on the wrong property account number.

The following are instructions on how to address the problem of a mortgage company failing to pay:

  1. Review any statement from the mortgage lender indicating a tax payment. If the tax payment amount does not match what was due for your property account, this is a sign that the company may have used your escrow money to pay on the wrong account or failed to pay on one of your accounts if your property includes multiple property account numbers.
  2. Whether or not you have such a statement from the lender, call the lender and ask them to tell you which property account numbers it used to pay. Do not offer your property account number. Ask which property account numbers the company used to pay.
  3. If the company insists that it submitted a payment on-time, you should request a copy of a cancelled check or a disbursement sheet that indicates the date and amount of the payment and the property account number that was used to submit the payment.
  4. When these problems occur, it is important to remain calm but firm. Many taxpayers recognize that the problems are resolved by being vigilant with the company, making repeated requests if necessary. Also, you may monitor the payment of your taxes online at Property Tax Inquiry. Next enter your nine-digit property account number OR your property address.
  5. If you believe no payment was made or your funds were misappropriated and submitted for the wrong property account number, you may want to file a written complaint under the Real Estate Settlement Procedures Act (also known as RESPA). RESPA is a federal law that regulates mortgage companies and the use of escrow. Lenders are required under RESPA to make timely and accurate payments and are forbidden from charging the homeowner/borrower for late penalties or erroneous use of escrow.

RESPA is a federal law that regulates mortgage companies and the use of escrow. Lenders are required under RESPA to make timely and accurate payments and are forbidden from charging the homeowner/borrower for late penalties or erroneous use of escrow.

The U.S. Department of Housing and Urban Development (HUD) oversees enforcement of RESPA. HUD recommends that you send a letter to mortgage company, separate from any mortgage payment, in the following format:

(Sample Letter of Complaint to Mortgage Company)

Attention Customer Service
Mortgage Company Name
Mortgage Company Address
Mortgage Company City/State/Zip

Subject: (Your loan number)
Names on loan documents
Property and/or mailing address

To Whom It May Concern:

This is a "qualified written request" under Section 6 of the Real Estate Settlement Procedures (RESPA). I am writing because (describe the issue or the question you have and/or what action you believe the lender should take. Attach copies of any related written materials. Describe any conversations with customer service regarding the issue and to whom you spoke. Describe any previous steps you have taken or attempts to resolve the issue. List a daytime telephone number in case a customer service representative wishes to contact you).

I understand that under Section 6 of RESPA, you are required to acknowledge my request within 20 business days and must try to resolve the issue within 60 business days.

Sincerely,
(your name)

 

For more information, you may go to http://www.hud.gov/offices/hsg/ramh/res/reslettr.cfm. Remember that HUD recommends that borrowers' letters include:

  1. Your loan number
  2. A reference to the "qualified written request under Section 6 of RESPA"
  3. The nature of the violation you believe has occurred
  4. What action you want taken
  5. How to reach you by phone or in writing so that the lender may respond to your complaint.

Under the law, the lender must respond within 20 days and resolve the issue within 60 days. If the company fails to meet those deadlines, write to:

Director, Interstate Land Sales/RESPA Division Office of Consumer & Regulatory Affairs
U. S. Department of Housing & Urban Development, Room 9146
451 7th Street, SW
Washington DC 20410

You should be sure to identify the violators by address and phone number and provide your own name, address, phone number, and loan number for follow up. Requests for confidentiality will be honored.

Remember:

  • ESPA complaint letters should not be included with your mortgage payment but should be sent separately to the customer service address.
  • You should continue to make the required mortgage and escrow payment until the request is resolved.
  • You may bring a private right of action under Section 6 if you suffer damages due to the lender’s servicing of the loan.
  • You should always receive notification that your tax information was requested by a mortgage company so that you may monitor the amount, exemptions, assessment changes, and the payment of the bill. 
  • Mortgage companies have access to our database in order to submit mass payments on multiple property account numbers – without copies of tax bills.
  • As in all jurisdictions, mortgage companies operating in Clark County are responsible for knowing which property account numbers they need to use to pay your taxes.
  • In creating an escrow account for taxes or insurance, a mortgage company assumes responsibility, under federal and state laws, for obtaining and paying the correct property bill and insurance bill on time and in full. 
  • Mortgage companies are not billed for taxes by the Treasurer’s Office because:
    • Different loans may or may not include escrow for taxes.
    • Loans may be paid off or refinanced at any time.
    • Loans are regularly re-sold between companies or paid by a new company after a merger or consolidation or the use by the company of a third-party tax payment service.