Can a title expert or a RE Lawyer please help me ???

Long story short:

I sold my house about a week after the Bank that held my mortgage paid school taxes from my escrow.

At the closing table, the title representative called the town of hempstead to verify if the taxes were paid and the town said "they haven't posted yet".

So the bank claims they paid the taxes, the town says they haven't posted them yet. About 3k sitting in limbo.

I am obviously entitled to this money at closing. Can somebody who is an expert tell me what the proper procedure for this situation is regarding a pending tax payment that the town is showing they haven't received yet?

What ended up in my situation, the title company decided to take an ADDITONAL 3k from my net closing proceeds and they submitted their own tax payment for the 3k to the town so they can "insure" the fact that the taxes were paid. I was promised by these people AND my attorney who allowed this to happen that I would probably get a check from the title company in 1-2 weeks after this payment was kicked back by the town.

Well we are now 5 weeks into the process, I just found out now by the town that they received two payments... and the town is saying they have to issue a refund which takes 8-10 weeks because they only do refunds "in batches". And best part about it the refund would go either to the title company or to my bank (whoever they decide paid second)... so it will probably be another 3-4 weeks of time for one of those two companies to pay me.

I feel that my attorney should have just held this money in escrow so it would have avoided having the town paid twice. I have a feeling somebody screwed up because I find this hard to believe that the way this was handled was "normal procedure".

What if I needed this 3k to pay my electic bill or to feed my children? I'd be up the creek without a paddle.

TIA.

Re: Can a title expert or a RE Lawyer please help me ???

Wow, frustrating.

But, I've seen it happen. I was a real estate paralegal for 10 years, so I can tell you this can happen when you close around tax due date time.

The title company HAD to collect the money. They are responsible for INSURING that title is free and clear (which includes any possible open taxes) for the purchaser & their lender at the time of closing. IMO, the title closer should have collected the money and held it in escrow. They can hold your money for up to 30 days ususally to ensure taxes were paid if they can not get an answer from the town. OR at least they should have verified with the town that they would not have accepted the 2nd payment.

Unfortunately, there isn't anything you can do at this point. It's very frustrating and we've all wished there was a better method. But right now, there isn't.

Sorry you have to deal with this! $3k is a lot of money, especially at this time of year!

Re: Can a title expert or a RE Lawyer please help me ???

Do you do agree that the money should have been put into escrow?

I almost feel like going after the title company for this. There is no excuse to send in a second check to the town when they could have simply held the money and waited. They had my money. Why not wait?

It's not like the 3k is going to break me. It's more the fact that this whole situation causing me more aggrevation and the aggrevation is worth more than any dollar amount. I really believe this should have been handled differently and somebody EFFFFFFED up.

Re: Can a title expert or a RE Lawyer please help me ???

Something similar happened to me after I refinanced. Title company collected tax payment that was due about 2 months after I closed. Got a letter from town that taxes weren't paid. I called bank and they ended up paying the tax out of my escrow, which would have ultimately resulted in an escrow shortfall eventually. I tracked down the title closer, who said that they paid it (doubt it) but that the check was never cashed. So, the title company sent me the refund check, which I cashed and then I paid into my escrow.

To make this long story short, it will take time but keep monitoring it and chasing after the title closer for that money.

Re: Can a title expert or a RE Lawyer please help me ???

Lovely... I just found out I paid a title closer "perparation fee" of $200 bucks at closing too. Or in other words... a tip.

I saw this check being written at the closing table and I had a feeling this was the tip, but I didn't bother saying anything.

Bleh. That $200 will most certainly be coming back home.

Re: Can a title expert or a RE Lawyer please help me ???

The title company can't really insure that you have clean title if they are not sure whether the taxes have been paid. They could not both hold the money in escrow and assure you of clear title. What if you turned around and sold the property before the taxes ever hit and it was later learned that the taxes were not previously paid? That could at least happen in theory. What does really help is to have an attorney who knows your particular town. Although I don't think that an attorney would have held this money in escrow, it would be nice if they would be able to tell you whether the time frames you are being told about are accurate.

Re: Can a title expert or a RE Lawyer please help me ???

Re: Can a title expert or a RE Lawyer please help me ???

Hey...I am the husband of Eireann and legal counsel to a title company. My wife asked me to respond. Anytime you post escrow with a title company you and the title closer (on behalf of the company) sign an escrow agreement which creates a contractual obligation on behalf of both parties. You should review this Escrow Agreement...it should state the title company would HOLD the escorw until a certain date. Once that date hits, the title company must confirm whether payment has arrived at the town. ONLY if payment has not arrived should the title company then pay the outstanding tax in order to avoid penalties and iinterest. I am guessing it was the 10/1 tax and you closed around late October early November (there is a 40 day grace period). Since, the bank sent out the payment there is NO WAY the title company should have paid it, unless the bank payment got lost or delayed for some reason (or misapplied to the wrong tax lot). They should have known the payment wouldhit inevitably. Someone may have screwed up at the title company by paying it, I bet. It happens all the time, and this is why I yell at employees and get yelled at by clients.

So, review the escrow agreement. If you do not have it, have your attorney fax you a copy. If it says HOLD and then PAY on a certain date, and they paid on that date, you can contact the town to see whether tax payment hit on or before that certain date. If the tax payment hit, you could call the title company up and say, why did you pay it? It was already posted. Give them 48 hours to get you back the refund or you will file a claim....you need that $3000. Frankly, all you will be doing is trying to pressure them into expediting the refund, and do the legwork to get it. But if you do not put heat on them, you will be on the bottom of the list.

Hope this helps. Hope it wasn't my title company!!!!!! By the way, if you need a good title company....hahahaha

Re: Can a title expert or a RE Lawyer please help me ???

Message edited 12/12/2009 12:18:28 PM.