Escrow Shortage Spread issues.

Guest 0.10 Dollars($)

Hi
My mortgage went way up because of my Escrow.
recently my loan was sold to a different bank.
my Mortgage was $917.77 and Escrow $184.89, Total= $1,102.66
I just got a Annual Escrow Account Disclosure Statement saying
that my principal is $917.77 and my Escrow is $247.40 and also
a SHORTAGE SPREAD of $93.77 for the total of 1,258.94
Can I Please get a Explanation on this matter.

Thank You.
Oscar. Sad

executivemortgageadvisor · Joined: 16 Mar 2008 Posts: 18 10.34 Dollars($)

Your payment amount may have increased due to property tax and/or insurance premium increases. Each year you will be provided with an Annual Escrow Account Disclosure Statement which shows projected escrow activity and can be used to compare your bills from one year to the next. An increase in one or more of your bills will result in an escrow shortage and consequently increase your monthly escrow payment to make up that shortage by the time the bills are owed.

larry · Joined: 27 Jun 2007 Posts: 3328 473.51 Dollars($)

Hi Oelvis,

Welcome to the forum.

I have to agree with the above poster that your monthly payments have increased because taxes and the insurance premiums have increased. You can only avoid it if you can make a lump some payment at a time but I think there is no meaning to make a lump some amount and delaying the inevitable.

Best of luck,
Larry

gmakerley · Posted: Tue Mar 18, 2008 6:40 am Post subject:

oelvis, you can certainly check in with your town's tax department to determine just what has happened with your real estate taxes - the likey culprit here. hazard insurance may change upward at times, but to cause such a shortage as you noted would be quite surprising.

you should be able to get further clarification from the servicing department of your lender as well.

Guest 0.10 Dollars($)

my taxes and insurance are paid up to date my escrow is short 90.00 monthly because according to my mortgage company I have to maintain one year of taxes and insurance in advance in my escrow account even though the payment there taking out equals the principal,interest, taxes and insurance i refered them to the RESPA act. I thought there allowed a cushion in the amount of 1/6th your yearly payment, which in my case would be 1,800 yearly for taxes,insurance and principal that would equal a cushion of 300.00 there allowed to have over and above the 1,800 for escrow with 250.00 being refunded back to me at years end am I right! please hep.

Guest 0.10 Dollars($)

I, have rental properties and i allowed my insurance to lapse. The mortgage company saw this and purchased insurance for me at a cost of triple the value of the home they said they could do this per the mortgage agreement is this legal. I have a 60 thousand dollar home and I have insurance worth 180,000.00 on the property, that they have placed on it and now they have rolled that insurance policy of 2,400.00 yearly cost into my monthly payment is this legal.

jameshogg · Posted: Mon Oct 20, 2008 12:20 am Post subject:

Hi darlene montgomery!

The mortgage company can definitely roll the insurance payments into your monthly payments and this is absolutely legal. However, whether they can buy you an insurance which is 3 times of the cost of the house will be better answered by a mortgage attorney. You can take help of an attorney in this case.

Thanks.

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