Posted on: 14th Jan, 2009 07:06 am
can a mortgage company hold your escrow check if your mortgage is not up to date? They sent us a letter outlining four options and we decided to have them refund our escrow to pay doctor bills. They then used it for our mortgage. Like other people we are trying to work with our mortgage company, they are very uncooperative, to modify our loan.
you people are confused, let me explain.
From what I've read on numerous websites, no one seems to be able to fully explain what an escrow account is and why people receive refunds. In ALL cases, any excess ($50 or more I think) in the new year MUST be refunded.
Here's where people are getting CONFUSED. This doesn't mean that you overpaid into your escrow account. I know, it's a hard thing for people to grasp but i's true. For instance, lets say you have taxes owed in january for $2,000. At the start of the year your lender may have $2,300 in the escrow but they are FORCED by the goverment, which is extremely stupid by the way, to send you back the money. (They do this because they are basically not smart enough to come up with a better way to do it, which isn't hard). So here you are thinking you overpaid, but reality the lender needs that money to pay for the taxes to the governmet, yet the government forces them to send it back to you. Now you get a refund check, but all your monthly payments increase so that you can even get a refund check.
So the main thing that happens here, is the government tried to put limits on what the lenders can keep and charge per month, so they are forced to refund checks at the start of the year. But because of that, now lenders are forced to charge more per month just so they can afford to give you that refund check. Make sense? It's an extremely flawed system, just like anything else the goverment creates, but rest assured, that you can either stick that money back into your escrow and enjoy perhaps a slight reduction in your monthly payment (because they do add in a slight cushion for taxes that change each year (and they don't know what they will be till the county ells them which is another flaw in the system)....or you can take your refund and enjoy a slight increase in your monthly payment. Overtime basically your monthly payment should remain constant granted you continue to take your refunds each year. It's basically like taxes in another form. You are forced to give money away interst free, and then at the start of the year you get your refund back from the government, or in our case, the lender. It's almost just another way to take more money form people and pay it back later (a loan) withoit having to pay anything for it.
Thank you government for making the law where we must be given a refund check at the end of each year.
Do you get it now? The lender isn't the problem, it's the government making them give consumers refund checks that those lenders need "most of" to make payments.
Here's where people are getting CONFUSED. This doesn't mean that you overpaid into your escrow account. I know, it's a hard thing for people to grasp but i's true. For instance, lets say you have taxes owed in january for $2,000. At the start of the year your lender may have $2,300 in the escrow but they are FORCED by the goverment, which is extremely stupid by the way, to send you back the money. (They do this because they are basically not smart enough to come up with a better way to do it, which isn't hard). So here you are thinking you overpaid, but reality the lender needs that money to pay for the taxes to the governmet, yet the government forces them to send it back to you. Now you get a refund check, but all your monthly payments increase so that you can even get a refund check.
So the main thing that happens here, is the government tried to put limits on what the lenders can keep and charge per month, so they are forced to refund checks at the start of the year. But because of that, now lenders are forced to charge more per month just so they can afford to give you that refund check. Make sense? It's an extremely flawed system, just like anything else the goverment creates, but rest assured, that you can either stick that money back into your escrow and enjoy perhaps a slight reduction in your monthly payment (because they do add in a slight cushion for taxes that change each year (and they don't know what they will be till the county ells them which is another flaw in the system)....or you can take your refund and enjoy a slight increase in your monthly payment. Overtime basically your monthly payment should remain constant granted you continue to take your refunds each year. It's basically like taxes in another form. You are forced to give money away interst free, and then at the start of the year you get your refund back from the government, or in our case, the lender. It's almost just another way to take more money form people and pay it back later (a loan) withoit having to pay anything for it.
Thank you government for making the law where we must be given a refund check at the end of each year.
Do you get it now? The lender isn't the problem, it's the government making them give consumers refund checks that those lenders need "most of" to make payments.
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