Escrow Shortage Spread issues.

Im scared to no end. Just got a letter saying I have a total escrow shortage of $5800. My payment for nxt month just jumped by $800 plus. I am in no way prepared to pay this. Do I have ANY options at all? Please help.

Hi Javier!

Welcome to forums!

You will have to make the updated escrow payments or else there would be a shortage in your escrow account. Thus, your property taxes and insurance will not be paid on time. You can contact the lender and check out if he can help you in this regard.

Feel free to ask if you've further queries.

Sussane

Thank you so much for your response. $800 is just too much of an increase for me to pay. Basically, its pay it in full or pay it all at once is that right? No other recourse? Thats the part that is hard to swallow.

Hi Javier,

As suggested by Sussane, you should speak to your lender in this regard. As far as I know you will have to pay it in full or put an extra amount towards your escrow payments every months. I don't think there is any other recourse in this regard.

Thanks

Thank you both again for the your responses. Yea, it looks pretty bleak. Going to have to look at my finances and see where and how I can make up for that amount. Great site, with really nice folks! Thanks, and I'll keep you posted.

So, do you think it is good that you should pay the escrow shortage? or just let it roll and pay the new mortgage payment? Someone please answer to my post

[Email address deleted as per forum rules. Thanks.]

Hi RUN!

Welcome to forums!

As far as I know, you should pay your escrow shortage or else the lender will not be able to pay your home insurance premiums and your property taxes.

Feel free to ask if you've further queries.

Sussane

We bought a new contruction house june 2009. We just recieved a letter regarding escrow stating that it is short by $10,500!! WTF?? I don't understand this. We called the bank that same day and they couldn't give us a straight answer. The only thing i can think of is the builder didn't pay his taxes but would the bank allow the house to be sold under this condition? please help!

Hi Debbs,

Your query has been replied to in the given page:
http://www.mortgagefit.com/problems/shortage-escrowaccount.html

Just take a look at it. I hope it'll help you.

Thanks

I just got a a notice that my escrow acct is over $4,000 short!!! Please help! Is this customary?

Increases can occur simply because the taxes and insurance in general, which is held every year in fees, but larger deficits are usually caused escrow by the lender at closing escrowing correctly.

There may be a shortage in your escrow account but I don't think this is customary. May be, the property taxes have increased and thus, there has been a shortage in your escrow. You will have to pay off the deficient amount and bring the escrow account current.

If i have an escrow shortage and I missed the due date to mail it in. Is it still wise to mail it in even if its late or will it not even make a difference now? I forgot about it but i usually mail the shortages in so my payment dont increase.

Hi tee,

You should inform the lender about the error and send him the mail with the required amount that you need to pay. If you do not do so, the lender will add late fees to it and amount will increase.

Thanks,

Jerry

Darlene's rental property insurance showing a replacement value of $180,000.00 when the value of the property is only $60,000.00 is very questionable.

I am interested to know if the first year's premium was the cause of the shortage...if so, I think it is unlawful because escrow accounts are for paying projected future Escrow Items.

Usually, the mortgage has a special provision for protective advances and the terms for repayment of the "additional debt" that results. Those repayment terms do not include charging the amounts to an escrow account.