Posted on: 27th Jan, 2009 05:44 pm
Is there a California law that allows the mortgage holder to cancel their impound account?...Our new mortgage broker set up our re-fi with an impound account and also told us we could cancel the impound account at any time. We would have to sign papers stating we were responsible for taxes and insurance ( duh!!) and that all impounds would be refunded. We went along with this because he said it would close the loan faster and it was CA law that impound accounts wiere optional. Is this true?
Hi rj_thomas,
An impound account is also known as an escrow account. It is set up by the lender for you so that you can prepay certain recurring costs at closing, such as property taxes, hazard insurance, mortgage insurance and others. There are some lenders who may let you waive your impound account, but may ask you for additional points during your closing.
You may speak to the lender now and check if you will be able to close your impound account. However, it is always recommended to go for impound account as it helps in paying the taxes and insurance.
Thanks
An impound account is also known as an escrow account. It is set up by the lender for you so that you can prepay certain recurring costs at closing, such as property taxes, hazard insurance, mortgage insurance and others. There are some lenders who may let you waive your impound account, but may ask you for additional points during your closing.
You may speak to the lender now and check if you will be able to close your impound account. However, it is always recommended to go for impound account as it helps in paying the taxes and insurance.
Thanks
try to talk and discuss with you lender, he will help you.
Hi Rj_Thomas,
Your broker is correct in saying that in California there's a law that allows you to cancel the escrow account. There are other states also where such an account can be canceled. These states are California, Minnesota, Illinois, and the District of Columbia.
May god bless you.
Samantha
Your broker is correct in saying that in California there's a law that allows you to cancel the escrow account. There are other states also where such an account can be canceled. These states are California, Minnesota, Illinois, and the District of Columbia.
May god bless you.
Samantha
i am refinancing my loan with wells fargo; no cash out. i just want a lower interest rate. they tell me this is a fnma loan and under pres. obama's new guidelines, i can refinance even if my value is less than the new mortgage amount.
however, in the paperwork i just received, they are factoring in an impound for taxes, insurance, etc. i do not want an impound account. besides, they are overcollecting (per my last statement from local tax assessor). can i refuse an impound account with them or am i forced to let them collect because of this being a fnma loan?
however, in the paperwork i just received, they are factoring in an impound for taxes, insurance, etc. i do not want an impound account. besides, they are overcollecting (per my last statement from local tax assessor). can i refuse an impound account with them or am i forced to let them collect because of this being a fnma loan?
Ginny, you do NOT have to pay the impound accounts if you would not like. But in a lot of states there is a hit to the rate to not include this. Also, your broker may not have known you didn't want to impound. If you did tell him/her, just tell them to remove them.
If they are overcollecting, this may just be the estimate. The main impound account you will want to look at is the one on docs. This isn't a fee that the broker makes up, the lender chooses how much they want to impound. THey usually leave room for a cushion as taxes usually increase ever year.
If they are overcollecting, this may just be the estimate. The main impound account you will want to look at is the one on docs. This isn't a fee that the broker makes up, the lender chooses how much they want to impound. THey usually leave room for a cushion as taxes usually increase ever year.
Ginny, if you are referring to a Fannie Mae Refi Plus or Freddie Mac Relief Refi, I believe it is a requirement to establish an impound acct. The good news is that they're much more flexible in qualifying guidelines such as allowing a loan up to 105% Loan-To-Value as you had hinted at.
Hi, I'm about to take out a mortgage with Wells Fargo on a new construction and the loan officer is trying to use up some seller's incentive money for pre-paid property tax. In order to do so, she says we have to set up an impound account. But doesn't an impound account mean we have to keep paying into the account every month, and therefore Wells Fargo will never use up the money in the account? And is it easy to cancel the impound account with WF at a later date?
Hi Danny!
Welcome to forums!
An impound account is normally created by a mortgage lender to pay off the borrower's property taxes and insurance costs. Your lender will use that money to pay off your property taxes and insurance costs every year. As far as I know, the lenders won't be ready to cancel the impound account on a later date.
Sussane
Welcome to forums!
An impound account is normally created by a mortgage lender to pay off the borrower's property taxes and insurance costs. Your lender will use that money to pay off your property taxes and insurance costs every year. As far as I know, the lenders won't be ready to cancel the impound account on a later date.
Sussane
when can the borrower drop his/her impound account if they have a Fannie Mae Loan?
Thanks
Thanks
As far as I know, lenders will not allow you to cancel the impound account. However, you can refinance the loan with new terms and conditions. This may help you in avoiding the impound account.