What to Do When Your Mortgage Servicer Fails to Pay Property Taxes
Opening your mailbox to find a delinquent tax bill from the city or county can be alarming, particularly when you pay into an escrow account every month expecting those obligations to be settled automatically. If your servicer neglects to make property tax disbursements on time, your home can face serious risks, including a tax lien. Navigating this issue requires prompt, organized communication with both your loan servicer and local government offices.
Checklist Item 1: Reach Out to Your Servicer Immediately
The moment you discover that your property taxes remain unpaid despite having an escrow account set up for that purpose, contact your mortgage servicer immediately. As explained by the Consumer Financial Protection Bureau (CFPB) guide on unpaid property tax bills, your servicer may be capable of resolving the situation directly over the phone.
When you call, keep notes on the date of your discussion, who you spoke with, and what instructions or explanations were provided. While an initial phone call provides a rapid way to alert customer support, phone conversations alone may not provide complete legal recourse if the problem persists.
Checklist Item 2: Submit a Written Notice of Error
Although a servicer might offer assistance by telephone, submitting your dispute in writing provides you with stronger legal protections. To establish an official dispute, prepare a written “notice of error” letter detailing the problem and state clearly that the servicer failed to pay property taxes from your escrow funds.
Make sure to include a clear copy of the tax statement you received from the city or county along with your notice. Putting your concerns in writing ensures there is a clear record of when the servicer was notified of the payment lapse. For more background on managing loan servicing disputes, review our walkthrough on disputing a mortgage error.
Checklist Item 3: Alert Your City or County Tax Authority
Do not wait for your mortgage servicer to finish its internal review before communicating with local officials. You should get in touch with your city or county tax authority as soon as possible.
Inform the tax office that you have an escrow account with your mortgage servicer and that you are actively working with them to correct the payment failure. This conversation is critical because when property taxes are not paid on time, the tax authority may place a tax lien on your property. Keeping the tax authority informed helps ensure they understand the situation while your servicer corrects the oversight.
Checklist Item 4: Connect with a HUD-Approved Housing Counselor
If your mortgage servicer has failed to pay your taxes out of your escrow account and the issue is not swiftly resolved, you may want to consult an attorney or a professional housing counselor. You do not have to navigate loan servicing breakdowns without help.
Homeowners can access guidance through several official channels:
- CFPB Counselor Tool: You can utilize the CFPB's "Find a Counselor" tool to locate housing counseling agencies in your community that are approved by the Department of Housing and Urban Development (HUD).
- HOPE™ Hotline: You can get advice from HUD-approved housing counseling agencies by calling the HOPE™ Hotline at (888) 995-HOPE (4673). This counseling resource is open 24 hours a day, seven days a week.
Understanding how your escrow allocations tie into your overall total monthly mortgage payment can also help you verify that funds were being collected properly each month.
Checklist Item 5: Consult an Attorney if Facing Legal Threats
In severe scenarios where property taxes remain unpaid for an extended duration, homeowners may face heightened legal dangers. If you find yourself facing imminent foreclosure or have been formally served with legal papers, the CFPB advice on servicer tax payment failures notes that you may need to consult an attorney.
A qualified legal professional can assist in evaluating the status of your property title, responding to formal court documents, and preventing the loss of your home through forced proceedings.
Checklist Item 6: File a Formal Complaint with the CFPB
When a mortgage servicer fails to meet its administrative obligations, delays correcting a demonstrated mistake, or refuses to take accountability for missed property tax bills, you have the right to escalate the matter to federal regulators.
You can submit an official complaint regarding your mortgage directly to the CFPB. Complaints can be filed online through the CFPB website, or you can register your issue by calling the bureau at (855) 411-CFPB (2372). Regulatory complaints prompt direct scrutiny of the servicer's handling of your escrow funds and missed tax payments.
Sources
Published November 9, 2026. No affiliate links on this page. Facts come from the sources linked above; check them for updates.