Towards the middle of 2002 I decide to take advantage of the lower interest
rates on homes. I had also remarried and wanted to make sure my new spouse
was on the title. The original mortgage was with Countrywide Home Loans (a
division of Treasury Bank N.A.) who has offices in the same building with
General Homes, the folks who built my house. I called Countrywide up and
discussed the options and finally started the ball rolling. On October 28th
2002 we signed the paperwork at the title company to refinance the house for
15 years at 6%.



The first sign that something was wrong was when I received a notice my
escrow account was over $1300.00 short and my monthly payment was going from
$999.22 to $1216.51. I was alarmed at this sudden rise in the payment and
contacted Countrywide.



Delia Whitley, with the customer service department at Countrywide, sent me
a fairly detailed e-mailed explanation on what the escrow account was set up
to pay and what the actual tax and insurance bills turned out to be. What
really caught my eye was the difference in my insurance payment. Her e-mail
had my home owners insurance going from $874.20 to $1898.00 in one year.



Now I knew something was very wrong. I've been trying hard to keep my
insurance premiums with State Farm down with all the mold claims going on
here in Texas. A $1023.00 increase would have been excessive under any
circumstance. I knew I could view the last 18 months of my old loan's
transactions on Countrywide's web page. I have been checking my payments and
escrow distributions there for over ten years. I pulled up old loan number
007338731, and sure enough, there it was. On the 17th of July 2002 Country
Home Loans sent a $1588.00 check to State Farm.



A follow-up phone conversation with Countrywide's customer service
department disclosed the methods they used when they created the new loan
package. He explained that it was standard practice to estimate the money
required to meet the taxes and insurance on the property. Gay Weed informed
me that: 1) This review of your escrow account is based on information
believed to be accurate. 2) Countrywide does not guarantee that this
information is correct. 3) This information is subject to change at any
time.



When I asked why they didn't use the real numbers, stored in their own data
base on my old loan, they became defensive. I was told I should have checked
the escrow account numbers to make sure they were right. I admit I should
have, now looking at this matter in retrospect. I had no idea they would use
fabricated monetary values for my property taxes and insurance. I had
refinanced my house with the same lender. I doesn't take a rocket scientist
to pull up my old loan history, located in their own computer, and copy
those historical "real numbers" into the new loan's escrow account.



This is when I got very angry. I referred to their "estimated" escrow
numbers as "bovine putrid fecal matter". I wanted to know where they got
their numbers from. They wouldn't say. I wanted to find out who sold home
owners insurance in Texas on a 2300 square foot house, about 100 miles from
the Gulf of Mexico, for $875.00 per year. They couldn't say.



What they did tell me was that Countrywide would have to collect an
additional 2 months of escrow reserve to cover any future shortages. The
RESPA Act allows them to do this. They would get to collect an additional
16.6% of my money, store it away to draw interest for Countrywide, because
they screwed up? I could prevent this by sending them $1300.38 to cover the
cost difference present in my escrow account. That is when I decided to
close the escrow account and take over all the payments for taxes and
insurance.



I am lucky. I just paid off my truck. I have some resources to draw from to
cover my taxes this year. Christmas was lean but we made it. What I'm
wondering now is how many people out there have fallen victim to this type
of "escrow estimate" scam run by Countrywide Home Loans. They have no reason
to use real numbers. The RESPA Act allows them to screw anyone who falls
into their trap. The victim is made to believe that Countrywide is helping
them out of this jam.



Has anyone else out there fallen victim to this type of scam? Your US
Government passed the RESPA Act to protect YOU, the consumer. Countrywide
Home Loans has figured as way to "pop" their own customer's a year after
they refinanced with the government's blessing. I just sent Tom Martino, the
radio consumer advocate, a copy of what you see above. Hopefully someone
will call him and add their own two cents worth..



--

Richard I Williamson
Houston, Texas