Returned School Tax Check Cashed By Previous Owner Of House

Location: Upstate New York

We bought our first house last year in July. About four months ago we got a letter in the mail that we were going to be delinquent on our school taxes as the second installment of 2025 had not been paid.

Our bank, through our escrow account, sent a check out soon after we purchased the house last year to pay the school taxes at a sum of roughly 2600$, when they really only needed to send 1300$. See, our school district allows its taxes to be paid in two installments, each half the total yearly amount. When they received the 2600$, they sent it back to the homes address, stating "Duplicate payment" of installment one, only need payment for installment two. I am guessing because they don't want to keep a balance sheet, but I digress.

However, when the school district sent the check to the homes address, not the bank, they still had the previous homeowners name, and such, the check got mail forwarded to the previous owner.

The previous owner cashed the check through Bank of America (BoA). This all happened last year, and was not caught until we got the delinquency notice.

Our bank freaked out, paid the school taxes through our escrow account (the correct amount this time), covered the late fees which was nice (around 160$ I think), and opened dialouge with BoA about this, what I am thinking, is a fraudulently cashed check. Our bank said BoA has 90 days to respond, which that is going to be on November 16th.

Our bank has now stated that if BoA does not respond in the 90 days about the wrongly cashed 2600$ check, there is nothing else they can do, and that we will have to take legal action against BoA or the previous owner both.

What can we do? Should we go to the state police? Report BoA for bad banking practices? Small claims court? This has all been very stressful, and we can't get our bank to care anymore.

Some additional information:

The check is in our banks name (or header), to the order of the school district, with a memo for our tax code for our house.

EDIT: Will be going after my bank via RESPA following this: https://www.consumerfinance.gov/ask-cfpb/how-do-i-dispute-an-error-request-information-about-my-mortgage-en-1855/

I will be claiming that my bank failed to properly and correctly manage my escrow account.