Mortgage Escrow Account Rules Could Mean Borrowers Are Owed Interest

Posted by on September 14, 2018 in Escrow News, New York, news | 0 comments

Mortgage Escrow Account Rules Could Mean Borrowers Are Owed Interest

A new class action lawsuit filed in U.S. District Court for the Eastern District of New York on Aug. 7, 2018 alleges that Bank of America routinely ignores mortgage escrow account rules.

Plaintiff Alex C. is a citizen of New York State and a resident of Queens Village. He is seeking to hold the financial giant accountable for their alleged failure to pay interest on escrow accounts that are often a condition of receiving financing for a residential property.

What is an Escrow Account?

As part of an agreement to provide a loan to purchase a home, banks often require that a separate escrow account be opened to lay aside monies from which to pay real estate taxes, home insurance and other related expenses. In some states, mortgage escrow account rules stipulate that the lender regularly pay interest on any accumulated funds in this specialized account.

These mortgage escrow account rules are established under the laws of the State of New York as well as several other states including California, Connecticut, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, Oregon, Rhode Island, Utah, Vermont and Wisconsin.

According to the lawsuit narrative, federal law backs up and supports the mortgage escrow account rules established by state law. According to the plaintiff, this law says that if the state requires the payment of interest as part of their mortgage escrow account rules or as part of any impound or trust account, then the creditor must pay this amount.

The Plaintiff’s Story

Plaintiff Alex claims he purchased a home located in Queens Village, N.Y. on Aug. 3, 2010. He says he obtained financing for this purchase through a loan from the Bank of America—the second largest bank in the U.S.

In Alex’s escrow interest lawsuit, he claims that the financial giant has never paid him quarterly interest on accumulations in his escrow account as stipulated by New York’s mortgage escrow account rules.

Alex claims that there is no fine print in his loan contract which allows the bank to ignore their obligatory requirement to pay interest on his escrow account. He seeks to represent a Class of similarly situated homeowners who have home loan agreements with Bank of America in the states where mortgage escrow account rules specify the need to pay interest.

The plaintiff believes that the number of homeowners with Bank of America home loans in these states is so numerous that a class action is the best way to legally address the alleged failure of the financial giant to contractually pay escrow interest.

Alex is asking the court to certify the proposed Class, himself as class representative and his attorney as class counsel. He brings the following counts secondary to these requests against Bank of America: Breach of Contract, Violation of State Consumer Protection Acts, Violation of State Escrow Interest Statutes, and Unjust Enrichment.

For all counts, the complainant seeks to obtain for himself and the Class an award of monetary and statutory damages. Alex also seeks injunctive relief against the bank.

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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