Question about escrow and STAR rebate tax credit

[weathergirl77]

As some of you remember I closed on March 11 this year and got 5.5% interest rate which I thought was good but the rates are so low now ahhh but I did get the tax rebate back.

I got a USDA loan which was sold to Chase.  Starting next year I will receive a STAR Rebate for the amount of $664 that comes off my county taxes,   Because Chase holds my escrow do they have to right to keep the rebate amount and just give me a credit in my escrow account?  I would like that money back for myself either in a check or off my monthly payments.  I live in New York State.

Thank you for all your help and replies!

[ShanetheMortgageMan]

Would this be a reduction in your property taxes, a 1 time rebate sent to you, or an annual rebate?

[weathergirl77]

It is an annual rebate Shane.

[weathergirl77]

This is what it is:

STAR is New York State's School Tax Relief Program that provides a partial property tax exemption from school taxes to homeowners. All New Yorkers who own and live in their home - whether it's a condominium, cooperative apartment, manufactured home, farm dwelling, apartment building or mixed-use property - are eligible for the STAR exemption on their primary residence.

[ShanetheMortgageMan]

Since they call it an exemption that typically means it's a reduction in the amount of property taxes you are charged, not credited back the difference of the rebate off the normal taxes.  So once you the tax bill with the new tax amount provide it to your lender and they'll adjust the amount you pay for the tax portion of your escrow account downwards, and if there is an overage of what they need at that time then they should send you the difference (like if tax bill was retroactive to when they were collecting the higher amount).  Your lender will likely all be sent a tax bill too, but I wouldn't trust it and contact them yourself with the info.

[weathergirl77]

Ok so they should send me the difference back.  But I thought Chase said they would credit my escrow as opposed to sending me the difference back and when I went to apply at my local town hall I thought the woman told me that a lot of times there is a fight between the lender who holds the escrow and the mortgage holder.  So my question is does Chase have the right to not give me back the difference and hold it in escrow for a credit?  I am not stupid it is to their advantage to do that not mine and it should not be legal to do that. 

[Anonymous]

I also live in NYS....when you get your school tax bill the STAR rebate will be reflected in the balance due...ie: your tax bill is $1000.00 - $500.00 STAR rebate = $500.00 due...Chase will pay $500.00.....

[weathergirl77]

Yes I understand that.  I will pay $1,300 total for school and county taxes.  I pay $108 a month now that goes into escrow and I have a 3 months cusion as of now.   The rebate will be around $625 or so and that is a surplus.  So my question is what happens to the surplus?  Does Chase have the right to put it back in escrow or can I demand they send it to me?  Please tell me if there is something I am not understanding about this. 

Thank you for all your help!

[Anonymous]

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@weathergirl77 wrote:

Yes I understand that.  I will pay $1,300 total for school and county taxes.  I pay $108 a month now that goes into escrow and I have a 3 months cusion as of now.   The rebate will be around $625 or so and that is a surplus.  So my question is what happens to the surplus?  Does Chase have the right to put it back in escrow or can I demand they send it to me?  Please tell me if there is something I am not understanding about this. 

Thank you for all your help!

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I ended up paying almost 800.00 more on my taxes bevause of the star rebate and over estimating. I ended up getting that back in a check and my escrow/mortgage payment was reduced/adjusted to reflect the true amount my taxes are I have First Niagara though