Posted on: 03rd Jul, 2011 11:50 pm
Help me, please! My lender last week notified us that my payments have been increased by $400 per month. He told me that they calculated the escrow payments in a wrong way. Now that they have found the error, they want me to pay extra so that they can recover the amount. My financial situation is not very good. Can I protest the sudden increase in payments? Shall I lose my home if I just pay the original amount?
Hi Jeremy,
As per your mortgage agreement, youve agreed to make monthly payments which include your escrow payments as well. It is always possible that the lender is trying to collect more than necessary. But you should note that there are strict HUD rules about how escrows are calculated and lenders do normally charge extra on escrow. If youe any doubts, you should ask the lender to explain the calculations to you. This will help you in clarifying the whole matter.
If the increase in escrow payments is justified, then youll have to pay it. If you dont pay, then youll lose your property. The lender will report you as delinquent and youll incur a late charge as well.
Take care
As per your mortgage agreement, youve agreed to make monthly payments which include your escrow payments as well. It is always possible that the lender is trying to collect more than necessary. But you should note that there are strict HUD rules about how escrows are calculated and lenders do normally charge extra on escrow. If youe any doubts, you should ask the lender to explain the calculations to you. This will help you in clarifying the whole matter.
If the increase in escrow payments is justified, then youll have to pay it. If you dont pay, then youll lose your property. The lender will report you as delinquent and youll incur a late charge as well.
Take care
Lenders often make errors in their escrow calculations, though they are not usually so high as to force such a drastic increase as you've seen.
Certainly, they have the right to make adjustments to ensure that your taxes, insurance, etc. are paid on time. Going over your original documentation from your closing will reflect what your rights and responsibilities, as well as those of the lender.
Certainly, they have the right to make adjustments to ensure that your taxes, insurance, etc. are paid on time. Going over your original documentation from your closing will reflect what your rights and responsibilities, as well as those of the lender.
As George mentioned, go through your loan docs, and your escrow paperwork to verify what was setup on escrow. Contact your insurance company for the insurance premium and contact your tax assessor for your tax bill. Once you have the figures, if you think the lender made an error, then you want to challenge their accounting. You have the legal right to send the lender a "Qualified Written Request" to dispute anything in regards to your account. The lender must respond within 21 days that they have received your request, and they have 60 days from receipt to correct the errors of give you an itemized report of the correct accounting they used. If the lender fails to respond, that is a violation of real estate settlement and procedures act (RESPA) a major violation.
At times I wonder if some of these questions are You should have been sent material which will explain the increase which likely will comprise of an amount to recover the escrow shortage as well as aper-month increase to reflect the incorrect amount used for one of the escrow disbursement items. The latter assumes the cause was an under estimation of either taxes or insurance.
The form likely in entitled Escrow Analysi or some such. Actually the aggregate method produces smaller shortages that the previously used individual account method. The form is not that hard to followll have a starting escrow balance with projected REGULAR (1/12th of annual taxes and insurance premium) escrow increase the balance for each of the 12 months shown. Deductions for taxes (usually twice a year) and the annual insurance premium will be shown in the scheduled months. The maximum negative escrow balance is the amount of your shortage. The lender may (and likely will) increase the shortage by a of 1/6 of the projected annual disbursements to offset any disbursement increases. One twelfth of the shortage (and cushion) will be added to the aforementioned monthly tax and insurance amount.
This form is similar to that you received to establish your escrow account when you obtained your mortgage. You should dove tail these forms to make certain these no missing funds and/or ask for a ledger history.
The form likely in entitled Escrow Analysi or some such. Actually the aggregate method produces smaller shortages that the previously used individual account method. The form is not that hard to followll have a starting escrow balance with projected REGULAR (1/12th of annual taxes and insurance premium) escrow increase the balance for each of the 12 months shown. Deductions for taxes (usually twice a year) and the annual insurance premium will be shown in the scheduled months. The maximum negative escrow balance is the amount of your shortage. The lender may (and likely will) increase the shortage by a of 1/6 of the projected annual disbursements to offset any disbursement increases. One twelfth of the shortage (and cushion) will be added to the aforementioned monthly tax and insurance amount.
This form is similar to that you received to establish your escrow account when you obtained your mortgage. You should dove tail these forms to make certain these no missing funds and/or ask for a ledger history.
Good post, Guest. There are, of course, many bogus posts on the Forum in general. This one may well be one, but we have to take things (for the most part) at face value.
We've discovered (not just recently) that the vast public is truly unaware of most of what transpires in the mortgage arena. That is undoubtedly due to lack of understanding in the first place, lack of guidance from loan officers, processors and the like, lack of care in providing valuable information from closing attorneys, and the list goes on.
Not everyone in the business is fully professional. Many were (and still are) in the business to make a quick buck and to hell with the public. Unfortunately, that's resulted in where we stand today in this industry.
Then, to top that off, the poor souls who find they're unable to maintain regular monthly payments on their mortgages must deal with a different person each time they speak with the servicer. Records of past conversations seem to disappear in the dust, and the reiteration of already-stated situations and issues is exhausting for people.
When you consider we've undereducated our population to begin with, then subjected many of them to some of the most heinous financing arrangements ever known to man, thus leading to problems of lost equity, ever-increasing interest rates, sudden and steep changes in escrows and the subsequent overall monthly payment (is this a run-on sentence or what?), is it any wonder that we see so many frustrated and agitated folk posting their commentaries on here?
Whew! That took me a while to type. Sorry, folk, but we in the industry (and I'm on the sidelines now) must be ever more cognizant of our duty to educate our consumers rather than shoving our products down their collective throats.
We've discovered (not just recently) that the vast public is truly unaware of most of what transpires in the mortgage arena. That is undoubtedly due to lack of understanding in the first place, lack of guidance from loan officers, processors and the like, lack of care in providing valuable information from closing attorneys, and the list goes on.
Not everyone in the business is fully professional. Many were (and still are) in the business to make a quick buck and to hell with the public. Unfortunately, that's resulted in where we stand today in this industry.
Then, to top that off, the poor souls who find they're unable to maintain regular monthly payments on their mortgages must deal with a different person each time they speak with the servicer. Records of past conversations seem to disappear in the dust, and the reiteration of already-stated situations and issues is exhausting for people.
When you consider we've undereducated our population to begin with, then subjected many of them to some of the most heinous financing arrangements ever known to man, thus leading to problems of lost equity, ever-increasing interest rates, sudden and steep changes in escrows and the subsequent overall monthly payment (is this a run-on sentence or what?), is it any wonder that we see so many frustrated and agitated folk posting their commentaries on here?
Whew! That took me a while to type. Sorry, folk, but we in the industry (and I'm on the sidelines now) must be ever more cognizant of our duty to educate our consumers rather than shoving our products down their collective throats.
In my case their is a 14.00 a year tax increase and no insurance increase and a escrow increase of 152.00 a month. I do think they make mistakes, just need to find out what I need to do to force them to fix it. From what I have calculated I will have 3400.00 in escrow at the end of next year when I am only required to have 498.00. An suggestions?
In my case their is a 14.00 a year tax increase and no insurance increase and a escrow increase of 152.00 a month. I do think they make mistakes, just need to find out what I need to do to force them to fix it. From what I have calculated I will have 3400.00 in escrow at the end of next year when I am only required to have 498.00. An suggestions?
Carnetta, you must have some documentation that proves your stance, don't you? Can you arrange a sit-down with them, or are they one of the national lenders that you wouldn't be able to find in a proverbial haystack?
I hesitate to suggest you sic a lawyer on them; after all that'll cost you, and it's not likely you'll be receiving any assistance in repayment of legal fees.
Take what you have to your fax machine, or scan it to your email and get it to them as quickly as possible.
I hesitate to suggest you sic a lawyer on them; after all that'll cost you, and it's not likely you'll be receiving any assistance in repayment of legal fees.
Take what you have to your fax machine, or scan it to your email and get it to them as quickly as possible.