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I was in the process of refinancing my home with RanLife. Shortly after the refinance went through my loan was sold to Chase bank. I received a check from the loan servicing company LoanCare for around $2500.01 in the mail shortly after receiving a notice that the loan was sold.

We weren't sure if the check was for us and thought it was probably supposed to go to our new lender. We called RanLife customer service and they told us that our loan agent would contact us. Our loan agent never called though I called two different loan agents from RanLife and was told that the money was ours to keep. He said that they close the escrow account and refunded it and they start a new escrow with the new lender.

So we cashed the check into our bank. A few weeks after cashing the check I began receiving phone calls from the LoanCare customer service department. I missed the phone calls and they left a message saying they wanted me to call them back. They called a few more times over the next few weeks and left the same message. When they recently called me, I called them back soon afterward. I was told that they made a mistake and sent the check in error. They asked me to give it back. I asked them to send me a letter regarding the mistake so that I have documentation of the issue.

What should I do to resolve the issue?

What do I need to do to prevent this from becoming a problem?

Will this affect anything with the new lender?

Update

I called up RanLife customer service and told them about the issue. They told me I should have received a refund check for my escrow account which should have been included the check I received. The customer service agent from RanLife told me that they had other customers that encountered issues with LoanCare. I was given the contact information of a customer service representative who is a liaison for issues between RanLife and LoanCare.

Up until recently I thought that RanLife and LoanCare were the same company. I realized just recently that they are two separate organizations. I think that this is something that created confusion for me. It seemed to me like the two didn't communicate very well for being the same company. Turns out they are separate companies which cleared up some of my confusion.

Final Update

I received this email from a representative at RanLife today

After doing some research, it looks like we definitely need you to return the $2500.01. There was a check for that amount that was posted to your loan in error a few days before your loan was paid off. Also, on your loan payoff they “netted the escrow” which means they reduced the amount required to pay off your loan by the amount of escrow you had in your account which was $xxx.xx; thus, you won't be getting an escrow refund as those funds were already used. Please let me know if you have any questions about this, feel free to call or email me. Loancare is also in the process of drafting a letter to explain this. Thank you for your understanding.

I've given them back the money so I am done with.

  • This is an interesting question but may be outside the scope of this site, because it sounds like you're asking more about the legal side of things than the financial side. – BrenBarn Aug 18 '15 at 2:19
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    Ask them for documentation explaining the reason the money was not owed to you. They say they made a mistake before, but how do you know they aren't making a mistake now. They should be able to provide you a solid explanation of what should have happened to the money, where it is going, etc. – mikeazo Aug 18 '15 at 12:09
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    @BrenBarn I've updated the question to clarify my intentions and better define my question for personal finance. This is in regards to the handling of money received in error. To me this relates to personal finance. – BrightIntelDusk Aug 18 '15 at 14:47
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    @BrenBarn - agreed, but I see no votes to close at all. In the end the details almost don't matter. When you get money that's not yours, I am unaware of you ever being permitted to keep it. – JoeTaxpayer Aug 18 '15 at 16:38
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    @JoeTaxpayer: See change of position. If receipt of the mistaken payment altered your decision-making in a way that can't be undone, and if your use of the payment was non-negligent and in good faith, you may not be required to pay restitution. It seems like in this case the issue wouldn't arise, since the OP can probably repay the amount without undue hardship. But were that not the case, the fact that the OP did attempt to check whether there was a mistake, and was told there wasn't, could provide some defense against forced restitution. – BrenBarn Aug 18 '15 at 18:19
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Quickly check the escrow balance with the new lender. What was supposed to happen is that the old lender would send the money they were holding in escrow to the new lender with information regarding how it was calculated, and what you should be charged each month. The new lender would continue servicing the escrow at the same monthly rate, until they did a yearly or semi-annually re-analysis of the escrow account. This is how all the mortgage transfers that I have had happened, as long as it wasn't due to a refinancing of the loan. If it was a refinancing the escrow transfer was done at closing.

He said that they close the escrow account and refunded it and they start a new escrow with the new lender.

The new company would not want to have the money sent to you, because they would now have to require you to send the money on to them. There could be a gap of several weeks. They would have to pay any bills that come due during that gap, without the cash in the escrow account.

If the escrow account is either zero, or very low, expect that the new company will be sending you a notice. The old lender could have convinced the new lender to refund the money back to them, or the old lender never transferred the funds.

If a notice comes from the new lender, failure to replace the money will put your loan into default. If the sum of money is large they may have to increase the monthly escrow amount to make it up in 6 to 12 months. After that period the monthly escrow will return to a more reasonable level.

If the old lender comes after you expect that the request won't be over the phone.

One thing the old lender could do is to request the loan be transferred back to them. The funds would then flow back to their company, but your escrow balance would now be zero, and they would now up your monthly escrow amount to get back on track.

  • Yes, the check that came to me was due to the refinance. Some of the money from the check was supposed to go to me as a refund for my escrow. It was about 1200.00 over the amount I should have received. – BrightIntelDusk Aug 18 '15 at 17:40
  • I've updated my description with the final resolution. – BrightIntelDusk Aug 19 '15 at 18:52

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