Howdy,
Sorry, this is long, but we need advice.
I was wondering if anyone could help with an issue we have with our mortgage lender, M&T Bank, who admits it was their error. This is the only home I've ever purchased and admit it's very confusing.
-We bought our home in 2020.
-Filed the Homestead Exemption effective January 1, 2021. Our monthly mortgage was about $1950/month.
-In May '25 our mortgage went up to $2233/month, which is really a lot more than we can afford.
-In July '25 we changed homeowner's insurance which was about $1100 cheaper. Helps a little. We received a check for $2977 from Homeowner's of America, who we just switched from, to AllState. We didn't know what this was for so we deposited it. I found out later it was for escrow so I deposited $2000 of it back into our escrow acct.
-Monthly mortgage was still way too high so in September '25, I called M&T Bank to see if anything could be done. The rep there (name is Ralph) explained things to me and said one thing I should check is to make sure M&T Bank's property tax department shows our homestead exemption.
-I called M&T Bank's property tax department (or tax department, whatever it's called) and discovered that NO, they did not show our homestead exemption. So since January 1, 2021 they were taxing based on the full property value instead of that minus $100K. I'm not sure if that's an accurate description of what homestead does but it's something like that, right?
-Later in September '25, M&T Bank said they made the adjustment. They didn't say exactly how we would be reimbursed, or how much. They just said they'll finish the transaction and get back to me.
-November '25, our mortgage dropped to $1461/month. The wife and I thought, wow, we've been getting screwed if there's that much savings in homestead. We paid $1461/month for about 6 months.
-May '26 our mortgage shoots up to $2508/month. WTF???
-Called M&T Bank and found out back in September, there was a bank error that stopped property tax altogether which has resulted in our escrow account being negative $5400.

I have recorded phone conversations where the reps all state there was a bank error on their part.
We can't afford $2508/month for the next 12 months!!
We never asked them to withhold property tax, or whatever terminology it is. Had we known this would happen, we NEVER EVER would've done so.
Every time I call them, they say "Oh yeah, I see the error. Let me put you on a brief hold …". They never resolve it. I was told an investigation would be opened and I would hear back the following Wednesday. That Wednesday was 2-3 weeks ago.
I sent a certified letter (asking for an explanation, who made the error, what should the correct amount be if it were set up properly, etc) that was supposed to be delivered by May 30th that has yet to be delivered.

Help us all out who is M&T bank and what state?

Any time you get an unexpected refund or rate reduction, someone screwed up.

If you just blindly accept the change and don't investigate, their screw up becomes yours.

M&T Bank is located in the New England part of the country, if that helps. They are our mortgage lender.

So we're screwed. Got it.

Did you actually ever pay out anything that you shouldn't have or are you just frustrated because they keep holding too much, then too little?

If you paid out something you shouldn't have, I would fight to get that fixed.

If you are just upset that they didn't pull for taxes for 6 months, then are having to pull more to cover the shortage, I'm not sure how much you should expect to get from them. You owe what you owe and while it sucks that you owed (for instance) $1500/month and paid $1000 for 6 months, then had to pay $2000 for another 6 months, you didn't really pay anything that you aren't on the hook to pay.

This is why I hated when we escrowed. They were always correcting to the last year and always overshot, so we could never get used to a consistent amount, or even close. I much prefer paying my own, but you don't always have that option.

As jdcag said.. you owe what you owe. Not to be rude but I'm assuming when you went to ~$1400/mo you were spending the money you "saved" on other things.

I understand this is your first home purchase, but with taxes and insurance your monthly is going to go up every year almost. Understand money can be tight but I'm not really making sense of how you can afford $1,950 no problem but $2,233 is something you absolutely can not afford. To me it sounds like you might be living beyond your means.

Your home purchase is the most important financial decision you'll ever make. I highly, highly recommend you do some research on what that entails and what to expect moving forward.

aggieclay said:

---

So we're screwed. Got it.

---

I know it's frustrating and unpopular, but you have to fight just as hard to pay enough as you do to not pay too much… although they're more prone to take extra money than not enough.

If you don't have an amortization schedule on a spreadsheet that you update with every payment and every escrow adjustment, that's my suggestion. If you're trusting a bank to account for every penny, you are the auditor.

Unfortunately, you will need to pay the increase to get back to whole. I would recommend taking everything out of escrow. They will balk and throw some rules at you about protecting the bank with an escrow to make sure you are paying insurance and taxes. However, ask and see what happens. When I used to have a mortgage, I always handled my insurance and taxes outside of escrow.

My apologies on this. Honestly, I don't spend a lot of time on these boards and this is really the only one I check. If you want to remove it ok.

caleblyn: I'll look into this. When I asked them to fix the homestead exemption portion, they were not supposed to stop anything. Escrow should've continued as it had been. That's the error they admit they made. From what I understand, if it had been continued, it would've never gone negative.
Other questions I have, and nobody has given us this info, is how much was overpaid by us, and how was it going to be returned. When the monthly mortgage dropped that we paid over the next 6 months, was that enough to cover all of what we overpaid?

TecRecAg: this is called living paycheck to paycheck. My wife and I worked a second job for a long time to build up a savings. Going from $1950 to $2233 is a not ideal for us. Then, going up another $275 sucks, for US. At this rate though, we'll eventually go through our savings and end up selling. My apologies that we don't have as much money as you, or spend our money as well as wisely as you. Kudos to you sir.

The bank doesn't charge you property tax, the government does that. So it doesn't matter if the bank included your homestead exemption, as long as the government had it.

The homestead exemption just lowers the taxable value of your home. Property taxes are based on a fixed percentage of the value of your home. If you get a reduction of the home value you get a reduction on the taxes owed.

The escrow account is there to make sure taxes and insurance are getting paid. This is a great thing if you don't plan ahead so you won't get blindsided by a huge tax bill or insurance premium. I think it's simpler to just pay that directly and avoid the escrow if that's an option, but you will have to budget so you can afford the lump sum payment on tax day and the lump sum charges for insurance.

When we bought our first home we had to have an escrow account. They collected a monthly amount to cover taxes and insurance, but it was a new construction and the estimated property value was only for the land. Once the dwelling got included and the true property value was assessed, our escrow was short. So the next year our premiums jumped up so they could recover the shortage and then it went back down again. This sounds like the same thing you are describing. I thought we spent a lot on the house, but it was still about 20% of what the experts told us we could afford. So it wasn't an issue when the monthly payment went up. That was also 25 years ago.

So as your monthly premium for the year is swinging up and down, you aren't getting screwed. It's just a pendulum trying to find the right balance. You were being undercharged when your monthly payment was low. When the payment amount got jacked up it was just to recover the shortage of the escrow. It sucks if you got blindsided by it.

You have to pay taxes and insurance. Whether you pay that in full at the end of the year or you rely on an escrow to collect it each month based on inaccurate estimates, you still end up paying the full amount eventually.

And your taxes will be going up every single year since your tax district raises the value of your house every year. (Unless you live in Detroit or some other ****hole where property values are in decline

aggieclay said:

---

Howdy,
Sorry, this is long, but we need advice.
I was wondering if anyone could help with an issue we have with our mortgage lender, M&T Bank, who admits it was their error. This is the only home I've ever purchased and admit it's very confusing.
-We bought our home in 2020.
-Filed the Homestead Exemption effective January 1, 2021. Our monthly mortgage was about $1950/month.
-In May '25 our mortgage went up to $2233/month, which is really a lot more than we can afford.
-In July '25 we changed homeowner's insurance which was about $1100 cheaper. Helps a little. We received a check for $2977 from Homeowner's of America, who we just switched from, to AllState. We didn't know what this was for so we deposited it. I found out later it was for escrow so I deposited $2000 of it back into our escrow acct.
-Monthly mortgage was still way too high so in September '25, I called M&T Bank to see if anything could be done. The rep there (name is Ralph) explained things to me and said one thing I should check is to make sure M&T Bank's property tax department shows our homestead exemption.
-I called M&T Bank's property tax department (or tax department, whatever it's called) and discovered that NO, they did not show our homestead exemption. So since January 1, 2021 they were taxing based on the full property value instead of that minus $100K. I'm not sure if that's an accurate description of what homestead does but it's something like that, right?
-Later in September '25, M&T Bank said they made the adjustment. They didn't say exactly how we would be reimbursed, or how much. They just said they'll finish the transaction and get back to me.
-November '25, our mortgage dropped to $1461/month. The wife and I thought, wow, we've been getting screwed if there's that much savings in homestead. We paid $1461/month for about 6 months.
-May '26 our mortgage shoots up to $2508/month. WTF???
-Called M&T Bank and found out back in September, there was a bank error that stopped property tax altogether which has resulted in our escrow account being negative $5400.

I have recorded phone conversations where the reps all state there was a bank error on their part.
We can't afford $2508/month for the next 12 months!!
We never asked them to withhold property tax, or whatever terminology it is. Had we known this would happen, we NEVER EVER would've done so.
Every time I call them, they say "Oh yeah, I see the error. Let me put you on a brief hold …". They never resolve it. I was told an investigation would be opened and I would hear back the following Wednesday. That Wednesday was 2-3 weeks ago.
I sent a certified letter (asking for an explanation, who made the error, what should the correct amount be if it were set up properly, etc) that was supposed to be delivered by May 30th that has yet to be delivered.

---

Wait. You didn't question an $800 drop in monthly mortgage? Really? Even using the original number as a starting point that's $6k per YEAR. How could you not at least look to see WHY??? If the number goes down at all, thats a huge red flat that you NEED to verify. If it goes down a little, it's ok to be cavalier if you want since a small amount is easy to make up for. But THAT much...? How could you not at least check the math and make sure that there isn't a mistake done?

I remember when I bought my commercial property in SF that they calculated the property tax owed based on the previous owner's taxes (prop 13 made taxes relatively fixed). Since the previous valuation was almost nothing, the taxes were ridiculously low. So when the bill was like $1000 a year, after about 1 second of being excited, I knew there was an issue. Took literally 1 minute to see it was clearly not accurate, and I looked into it. Turns out that they take a couple of years to catch up in their system since apparently inputting a number into a computer to adjust that calculation takes 2 years. Knowing this didn't seem right, and doing a very simple use of logic in my head all by my lonesome, I realized that this was not an error per se, but that they would want that difference eventually, so I set aside the expected amount to be ready for when I did eventually get the amended bill. When I got my bill for 20-25+k for their retroactive calculation years later, I was ready. Because when something doesnt seem right, then it isn't right, especially when it comes to banks and the government. Any error or adjustment or delay that involves them is ultimately your responsibility and when something drops $6k per year (!!!!!!!!!) then ALWAYS look into that. Because regardless of the reason, you will need to be responsibility for that adjustment. The fact that you didn't even question, and basically dismissed it as insignificant, for such a HUGE change is amazing to me. Also, I don't know about where you live, but in Boise they send me a letter every year to know exactly how much property tax will be for that year, and my mortgage lender portal shows how much of my mortgage payment (and insurance) goes to taxes, which they take care of. Multiple that number by 12, compare to the letter the state sent me, then see if they're close. Another thing to compare that takes all of half a second. If my mortgage goes up more than $50 a month I check to see why. Good habit to get into.

Sorry to be blunt, but come on man...

At the end of the day, in the world we live in, you are responsible for other people's mistakes when it comes to your money. Knowing that, you have to always question when things don't seem right. If it's a small change, then there's probably not a real mistake and you might benefit. If there's a huge change in your benefit then always be skeptical, because it's almost always a mistake. And once that mistake is found, you will have to pay for it regardless of who is actually to blame.

Also, sir, this is a Wendy's. The forum where you might get people to be a little less blunt and maybe even a little less honest is that way.

I've gotten a better understanding of escrow. I don't understand why it went negative. They were only supposed to make up for whatever overpayments we've made since 1/1/2021. I can't get an explanation on the amount, what the plan was, who authorized it, etc. I have 7 recorded phone calls going back to September '25 when I was told to ensure they showed a homestead exemption, as well as 3 or 4 reps saying they made an error.