Escrow payments were set up in my loan contract, can the mortgage company change the amount required to pay?

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Can they increase my escrow payments and without prior notice?

  1. Reply
    February 15, 2011 at 8:44 am

    I believe that they can determined on how much your taxes are. If your taxes go up so does your escorw.

  2. Reply
    February 15, 2011 at 8:50 am

    Yes, but only if the mortgage company originally miscalculated (which is the often the case when it comes to taxes). Your lender will review your account once a year to make adjustments because certain elements do change over time (the price of your home owners insurance, taxes because the value of your house has increased). Usually they give you a months notice.

  3. Reply
    Kenneth D
    February 15, 2011 at 9:47 am

    There are specific rules for determining escrow amounts. Your mortgage company will do an annual escrow analysis and determine the amount that should be paid. If your insurance or taxes increased, then your escrow amount will increase. You should ask the mortgage company why your escrow amount increased. If it is because of an increase in insurance, you may be able to find a lower insurance rate with another insurer and save money.

  4. Reply
    February 15, 2011 at 10:46 am

    The payments can go up to cover real estate taxes and homeowner insurance increases. Usually you are notified of the change.

  5. Reply
    February 15, 2011 at 10:50 am

    They will increase every year due to the fact that they use what is in escrow every year and also if your taxes and insurance goes up

  6. Reply
    February 15, 2011 at 11:17 am

    Yes, they will generally go up every year, since your taxes and insurance rates almost always go up annually.

    One problem with the system is that they can only collect for future taxes based on what they are this year. So, you’ll basically run a shortage year after year.

    They are required to do an annual review. If they are overcollecting, they have to refund your money. If, as is usually the case, they are undercollecting, they can require you to pay them up or sometimes they’ll let you spread it over a few months.

    And if you read your contract regarding the escrow accounts, you’ll see that it clearly discloses that they have every right to collect the amounts needed, even if they rise.

  7. Reply
    February 15, 2011 at 11:50 am

    An annual review of your escrow account is done by your lender. They will send you the results of that accounting. Your payment will adjust (up or down) based upon the current years’ information. Lender’s send you notice of this.

    You should also receive info from your insurance company and local tax body as to changes in those accounts.

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