Bank screwing me on Condo taxes?

Malkor

Hmm. I bought a Condo last year. This year I got a letter from the bank saying that they're having a problem paying the taxes I paid to them to the city.

Is this my problem or theirs?

Thanatos

Malkor wrote: »

Hmm. I bought a Condo last year. This year I got a letter from the bank saying that they're having a problem paying the taxes I paid to them to the city.

Is this my problem or theirs?

What, exactly, does this letter say? Because it sounds like it's their problem, but could very easily become yours.

Malkor

Ugh.

I have it at home. I will post the details later. I'm not the only one that received the letter either. A bunch of people in the building have got it too.

Goddamn Citibank.

Bowen

Start calling the city and finding out what you should be doing so you don't get hit with late fees, interest, and your property being foreclosed, or put into a tax lien auction or whatever it is. Be proactive, you may be getting boned by someone.

Thanatos

Malkor wrote: »

Ugh.

I have it at home. I will post the details later. I'm not the only one that received the letter either. A bunch of people in the building have got it too.

Goddamn Citibank.

Citibank is your bank? Okay, that puts you in a much better position. I was thinking it was going to be some sort of very local bank or something. Citibank is in some trouble, but they're big, so they're probably going to be getting some federal bailout money.

From what I know of the situation that you've told me: the condo is in your name. You have a loan from the bank that stipulates that you pay your taxes to them as part of your monthly payment, they pay them to the city when property taxes are due. So, while the taxes are technically your responsibility, the bank has taken on the duty of processing them and insuring they get paid. Now, the issue comes up if the bank declares bankruptcy. Since the condo is in your name, you are technically responsible for the taxes. While you've paid those taxes to the bank, and could sue them for the amount they haven't paid, if they declare bankruptcy, they're not going to give you any money. Which could leave you holding the bag.

I don't mean to freak you out, and I am not a lawyer, and there may be some specific protection on this kind of mortgage lender/lendee relationship I'm not aware of that keeps you safe; I'm just laying out the potential worst-case scenario for you. Knowing what state/city you're in would be helpful, as well as knowing exactly what the letter says.

Malkor

Well I live in Bridgeport, CT which is in Fairfield County. I could pay all the taxes myself if it has to come down to it, but obviously that'll be the last option.

I think, but don't exactly remember, that the problem is that there isn't an "individual real estate tax bill" for my unit because the property hasn't been sub-divided by the assessors office.

That's going by memory and an e-mail from a neighbor. I'll definitely look at the letter closer when I get home.

Quoth

Are banks allowed to use escrow money for things other than their intended use? I thought that basically went into a special account and didn't get touched, as opposed to a big pot that could be used for whatever.

But definitely be proactive and get a hold of your city/county/state tax assessor's office and try to talk to someone as soon as possible. In Miami, property taxes are due by March at the latest and after that there are late fees, but banks are required to pay by November because there is an early payment discount. Your due date may be earlier or later, but you won't know unless you call or check their website.

Quoth

Malkor wrote: »

Well I live in Bridgeport, CT which is in Fairfield County. I could pay all the taxes myself if it has to come down to it, but obviously that'll be the last option.

I think, but don't exactly remember, that the problem is that there isn't an "individual real estate tax bill" for my unit because the property hasn't been sub-divided by the assessors office.

That's going by memory and an e-mail from a neighbor. I'll definitely look at the letter closer when I get home.

Is this a new building? Or a co-op? These are the only reasons I can see as justifying one tax bill for the whole building.

The bank may be trying to squeeze you for unpaid taxes by other unit owners. You shouldn't be required to foot that bill; however, you may be responsible for any shortfall in association fees.

Thanatos

Malkor wrote: »

Well I live in Bridgeport, CT which is in Fairfield County. I could pay all the taxes myself if it has to come down to it, but obviously that'll be the last option.

I think, but don't exactly remember, that the problem is that there isn't an "individual real estate tax bill" for my unit because the property hasn't been sub-divided by the assessors office.

That's going by memory and an e-mail from a neighbor. I'll definitely look at the letter closer when I get home.

Ahhhh, okay, I was thinking it was more of a "we can't afford it right now, you're screwed" kind of letter. That's not so bad, and sounds mostly like paperwork.

Bowen

Quoth, that's exactly what I thought. Sort of like how a security deposit gets thrown into an account in your name and interest you accrue is paid back to you.

LaPuzza

Register of Deed/Assessors can never figure out condos, usually because the Declaration/Master Deed isn't prepared to properly deal with creating new tax parcels out of old ones.

I wouldn't worry, but I would keep an eye on the Treasurer's web site, and maybe make a call to the county assessor.

The Crowing One

Ask Citi for a record of your escrow account, as I assume taxes are escrowed into the monthly payment. I see this kind of issue often at my work. Get records of property taxes from the gov. and compare those with the escrow payouts.

It's your problem. Call Citi and resolve it. Feel free to PM me if they pull shenanigans. I deal with Citi all the time and they're generally a very reasonable bank.

Thanatos

bowen wrote: »

Quoth, that's exactly what I thought. Sort of like how a security deposit gets thrown into an account in your name and interest you accrue is paid back to you.

And if your escrow holder takes that money and spends it when they're not supposed to, your remedy is to sue them. If they're in bankruptcy, and have no money, there's not really anything you can do about it.

The Crowing One

Thanatos wrote: »

And if your escrow holder takes that money and spends it when they're not supposed to, your remedy is to sue them. If they're in bankruptcy, and have no money, there's not really anything you can do about it.

There's no reason to worry about this. Escrow issues pop up all the time, especially around the four quarters when actual tax bills are due. Call Citi and they'll tell you what's going on.

Bowen

Thanatos wrote: »

bowen wrote: »

Quoth, that's exactly what I thought. Sort of like how a security deposit gets thrown into an account in your name and interest you accrue is paid back to you.

And if your escrow holder takes that money and spends it when they're not supposed to, your remedy is to sue them. If they're in bankruptcy, and have no money, there's not really anything you can do about it.

Ah, are they not FDIC insured for such a reason? I find it hard to believe that an escrow account would break the cap.

If they can't be insured, well that just fucking blows.

All the more reason to handle taxes yourself.

Thanatos

bowen wrote: »

Thanatos wrote: »

bowen wrote: »

Quoth, that's exactly what I thought. Sort of like how a security deposit gets thrown into an account in your name and interest you accrue is paid back to you.

And if your escrow holder takes that money and spends it when they're not supposed to, your remedy is to sue them. If they're in bankruptcy, and have no money, there's not really anything you can do about it.

Ah, are they not FDIC insured for such a reason? I find it hard to believe that an escrow account would break the cap.

If they can't be insured, well that just fucking blows.

All the more reason to handle taxes yourself.

Are escrow accounts FDIC insured? I don't know.

But yeah, Malkor, it sounds like it's just an issue with the county or city Assessor, and while you should get on it now and get it worked out, it's probably just paperwork. No biggie. Ignore what I said above.