almeida wrote:My mortgage has an escrow account attached to it. My taxes and homeowners insurance both went up this year (surprise, surprise). I learned about the increases months ago when the tax bills went out and I assume the bank has known for a while too. I have been waiting for some kind of notice from the bank informing me that my monthly payment is going up but, so far, they haven't sent anything. Also, the website still tells me that my next payment amount is the same amount it has always been. Because they haven't told me otherwise, I've been paying the same amount I've always paid, which is my required payment plus a little extra to pay off the loan faster. When I checked my loan activity today, I noticed that some of my most recent extra payment went to principal and some went to escrow. Is the bank allowed to do that? Are they required to notify me that my escrow payment went up? Is it possible to get out of escrow and just handle the payments myself? Thanks for the help.
I had this type of thing happen over and over again. Even worse, my county gives a 3% discount if one's property tax bill is paid in full by the due date. The escrow company failed to make the deadline a few times and it cost me hundreds of dollars which they refused to take any responsibility for.
To answer your question: Yes, they're supposed to tell you when they need to increase your escrow withholding. In my experience, they seldom do. I believe they have the right to direct funds to your escrow account if the balance is projected to be too low to meet your obligations for insurance, tax and such.
Eventually I realized that I'm more reliable than the escrow company so when I refinanced I refused to setup an escrow account. I now keep my "escrow" money in a reward checking account earning 2.25% APY. I pay my insurance and property taxes on time and my blood pressure is lower. Now every year my mortgage processor threatens to sign me up for insurance because they think I haven't paid my insurance when I have. Every year I have to send them proof of insurance even though my policy is the same as it always was. Escrow company's seem to be really disorganized.
I tried to be "let out" of the escrow on my mortgage but that didn't go over so well. You may need to do a zero cost refinance through First Internet Bank (http://www.firstib.com
to get out of the escrow.