Escrow Abuse: Bank of America Mortgage Holders Report Systematic Overcharges

When Patricia and David Chen refinanced their Austin, Texas, home through Bank of America in 2024, their monthly mortgage payment was set at $2,340, including $680 for escrow. By January 2026, that escrow portion had ballooned to $1,020 — a 50 percent increase — despite their property taxes rising only 4 percent and their homeowner's insurance premium remaining unchanged. The culprit, they discovered after months of phone calls and document requests, was a duplicate insurance payment. Bank of America had paid their property insurance premium twice in 2025 — once correctly and once to a prior insurer that no longer held the policy. The resulting escrow "shortage" was passed directly to the Chens in the form of higher monthly payments.

A Pattern of Escrow Mismanagement

The Chens' experience mirrors hundreds of complaints filed with the CFPB in 2025. OPV's review of the complaint database found over 5,600 mortgage-related grievances against Bank of America, with escrow mismanagement ranking among the top three categories alongside payment processing errors and loss mitigation disputes. Common themes include: inflated escrow cushions exceeding the two-month maximum permitted under the Real Estate Settlement Procedures Act, duplicate tax or insurance disbursements, and failure to refund surplus balances within the required 30-day window.

A former Bank of America mortgage servicing specialist who worked at the bank's Jacksonville operations center until mid-2025 described an understaffed department struggling to keep pace with the volume of escrow accounts under management. "The system flags anomalies, but the queue to review them was always months behind," the former employee told OPV. "By the time someone catches a duplicate payment, the customer has already been paying an inflated amount for six months or more." The bank declined to comment on staffing levels but stated it "takes escrow accuracy seriously and works to resolve any identified errors promptly."

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The Cost to Homeowners

Escrow overcharges have a compounding effect on family budgets. For the Chens, the $340 monthly increase meant diverting money from savings and delaying planned home repairs. Worse, when they disputed the increase, Bank of America initially classified their reduced payment as a partial payment, triggering a late fee and a delinquency notice. "We were paying what we actually owed, but the system treated us as delinquent," David Chen said. It took 94 days and intervention from a CFPB complaint to resolve the dispute, receive a refund of the duplicate payment, and restore their original escrow amount.

Defending Your Escrow Rights

Homeowners should review their annual escrow analysis statement line by line, comparing projected disbursements against actual tax assessments and insurance premiums. If your escrow payment increases unexpectedly, request a detailed disbursement history from Bank of America in writing. Under RESPA, the bank must respond to qualified written requests within 30 business days. If you identify an overcharge, file a formal error resolution request. Keep all documentation, send correspondence via certified mail, and file a CFPB complaint if the bank does not respond within the statutory timeframe. Consulting a HUD-certified housing counselor — available free of charge — can also help navigate the dispute process.