Pappas Calls on Mortgage Companies to Rescind “Frightening” Letters to Homeowners, and Apologize

November 8, 2007

by Illinois RealEstateRama

And Demands the Companies Pay Taxes on Escrow Counts as Law Requires

CHICAGO, Nov. 8 /PRNewswire-USNewswire/ — Cook County Treasurer Maria Pappas today called on mortgage companies to rescind thousands of letters meant to “frighten” property owners into sending property tax bills to them and demanded that they pay taxes on their clients’ escrow accounts on time, as law requires.

Because the letters incorrectly warn homeowners that they “may” be responsible for late payments if they do not send the bills to the companies, Pappas said she has referred the matter to the office of Illinois Attorney General Lisa Madigan.

“Mortgage companies sent thousands of letters across Cook County, causing great concern,” Pappas said. “The mortgage companies should write another letter, this one rescinding the first, apologizing and promising to follow the law by paying their clients’ taxes on time.”

In the letters, the companies urged homeowners to send them bills due December 3, 2007. The letters warned that if the homeowners did not send the letters, the companies may not be able to pay on time and the homeowners may be responsible for late charges.

“The companies know that federal law requires them to make payment on time, and that they — not homeowners — are responsible for penalties when they pay late,” Pappas said. “They also know that they don’t need the bills to pay out of escrow.”

Pappas said her office knows of almost 125,000 letters sent to taxpayers by ABN-AMRO, Aurora, CCO Mortgage, CitiMortgage, Emigrant, Fidelity, GMAC, Harris NA, Homecomings Financial, Mortgage Center L.C., OCWEN Loan Servicing and others.

Pappas said the mortgage companies were trying to avoid paying a $5 electronic duplicate-bill fee imposed by Cook County ordinance. The companies regularly make 600,000 electronic payments without an original bill, Pappas said.

SOURCE Cook County Treasurer’s Office