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can a financial institute that holds raise my escrow payment

Posted on: 29th Jan, 2007 06:47 pm
I live in Jacksonville Florida and have a split 80/20 mortgage for my condo..can a financial institute that holds my mortgage suddenly raise the escrow for property tax from $89 per month to $125 per month? essentially they have upped my mortgage payment on the larger mortgage from 797 per month to 870 per month.. the basic mortgage principle and int. is still 702.00
Hi Seanlive,

The financial institution may have raised your loan payment because you are a few days behind on the payments. But the property tax in escrow account can only be increased when your property tax rate changes.

If your property tax rate increases, the escrow payments may not be sufficient enough to cover the taxes. The lender will then pay the tax deficit and in turn raise your escrow payment in order to make up for the new tax assessment along with the deficit.

Now, if there is any tax rate increase, your tax levying body should inform you about such an increase 6 to 9 months prior to the increase. The levying body will send you in mail as to what the new tax rate will be.

Thanks,

Sara
Posted on: 29th Jan, 2007 08:58 pm
The never notified us that the tax rate may have increased.. they did say that they had not set the escrow high enough topay the tax for 2006
Posted on: 30th Jan, 2007 01:10 pm
As per Section 6 of RESPA you have the right to ask the lender about the reason the escrow payments were increased. Send your "qualified written request" and lender is required to acknowledge it within twenty business days. If any error has occurred, he will correct it within sixty business days or provide you with a statement for the reason behind the increase.
Posted on: 30th Jan, 2007 02:06 pm
Hi Sean,

You should talk to the lender and enquire as to why he has raised the property tax payments in the escrow. it is better to know first and the pay. Otherwise, it may so happen that the lender is charging you just to incerase his earnings. Just clarify this with the lender before you start paying more on property taxes. Also, when you pay the tax, just check if the lender gives you an annual escrow account statement.

Thanks,
James.
Posted on: 30th Jan, 2007 09:28 pm
Sean,

By law your mortgage servicer has to give you an annual escrow statement. They can sometimes be hard to read. The taxes are completely beyond the control of your mortgage servicer. The tax rates can be changed by local government and the tax assessed value of your home can be increased or decreased depending on the market.

It would be flat-out illegal for a mortgage servicer to raise your escrow payments in order to "increase earnings" as jameshogg suspicions.

Sean, you said the property is in Jacksonville, FL which would be Duval County. visit this site
http://www.coj.net/Departments/Property+Appraiser/default.htm[ and look up your tax assessed value for 2005 and then for 2006 and you can see yourself if it changed. The county SHOULD have sent you an annual property tax assessment as well.

For one reason or another, when your loan was created the escrow account was setup in a way that you were not paying enough each month to cover the annual taxes. It wasn't until after the taxes were due (and paid by the lender) that they caught this error. To correct it you can pay the shortfall in a lump sum or have the shortfall added to your mortgage payments for the next 12 payments.

Call your mortgage servicer and ask them to help you out. There's no conspiracy here.
Posted on: 30th Jan, 2007 10:47 pm
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