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Started By
Message
What is your opinion on escrow accounts?
Posted on 1/27/11 at 2:06 pm
Posted on 1/27/11 at 2:06 pm
I have been dealing with a headache with the bank about the proper amount that should be payed into my escrow account for the past month or so. And of course, the Indian dude I am talking to has no idea what I am talking about. THIS SHOULD NOT BE THAT DIFFICULT. 
Here's the run-down: I "bought" the home about 6 months ago, and it was a brand new home. (therefore, 1st year property taxes are on land value only) So for the last half of 2010 I basically overpaid the tax portion of my escrow balance. So, I call them, request a refund, ect. and they tell me they need to run a new escrow analysis before any refund is issued... couple weeks later, I get a letter stating my escrow payments have been lowered to account for this. (basically they took the tax bill from last year, and divided by 12) Next, I informed them that this tax bill was an anomaly b/c of the new home construction, ect. and they do another analysis, but now fail to take into account the Homestead exemption! I basically asked them if I could TELL them what I wanted them to "save" for me (interest free - that is) and they said no..
So, back to the original question, what is your opinion on escrow accounts? Are there any advantages other than being forced to plan for large lump sum payments?
Are escrow accounts required? Does it vary? In short, I am thinking about just setting the $ aside (or have it auto-drafted from paycheck) and not have to deal with someone 1000 miles away fricking up my budget.
Here's the run-down: I "bought" the home about 6 months ago, and it was a brand new home. (therefore, 1st year property taxes are on land value only) So for the last half of 2010 I basically overpaid the tax portion of my escrow balance. So, I call them, request a refund, ect. and they tell me they need to run a new escrow analysis before any refund is issued... couple weeks later, I get a letter stating my escrow payments have been lowered to account for this. (basically they took the tax bill from last year, and divided by 12) Next, I informed them that this tax bill was an anomaly b/c of the new home construction, ect. and they do another analysis, but now fail to take into account the Homestead exemption! I basically asked them if I could TELL them what I wanted them to "save" for me (interest free - that is) and they said no..
So, back to the original question, what is your opinion on escrow accounts? Are there any advantages other than being forced to plan for large lump sum payments?
Are escrow accounts required? Does it vary? In short, I am thinking about just setting the $ aside (or have it auto-drafted from paycheck) and not have to deal with someone 1000 miles away fricking up my budget.
5
Posted on 1/27/11 at 2:11 pm to TigerDeBaiter
If it was on your HUD settlement statement that escrow will be collected, some lenders will not waive the escrow account.......call and ask to speak to the Tax Department...normally they need to have something in writing of how much the taxes will be from your local tax office.....if not they will go by last amount paid out or last figure provied by tax office....if not avaialbe just put extra money into escrow until they get correct amount...
Posted on 1/27/11 at 2:25 pm to TigerDeBaiter
I canceled my escrow account many years ago. I just keep track of it myself with an auto-deposit into my own savings each month. If its causing you a headache, just do the same. I dont believe they are required.
Posted on 1/27/11 at 2:50 pm to Htown Tiger
They don't have to cancel if listed on settlement statement at closing....there are a few states where the homeowner can cancel escrow, but even then there are are requeirements(ltv, no late charges, etc.)....
Posted on 1/27/11 at 4:20 pm to TigerDeBaiter
quote:
So, I call them, request a refund, ect
This is where you messed up. They would have gotten to the problem eventually. However, you called them got it them to take care of it out of the normal system.
Usually, if you don't escrow at closing, you are charged another quarter point on your origination fee as they still have to monitor if you are paying your taxes and insurance. Therefore, I understand why they would be hesitant to cancel your escrowing of funds after closing as they will have to do the extra work every year without the compensation.
Posted on 1/27/11 at 6:22 pm to TigerDeBaiter
I just let them do their thing, it keeps me from having to do it on my own.
Can't you claim a homestead exemption without going through them? Just get the money back from the taxing authority later, that way you don't have to mess up their precious process.
Can't you claim a homestead exemption without going through them? Just get the money back from the taxing authority later, that way you don't have to mess up their precious process.
Posted on 1/28/11 at 9:23 am to foshizzle
quote:
However, you called them got it them to take care of it out of the normal system.
WTF is this?
quote:
Can't you claim a homestead exemption without going through them? Just get the money back from the taxing authority later, that way you don't have to mess up their precious process.
I have claimed the exemption already, but does not show up on their records, I guess. Since it is January, I am going to try to close the account and set the $ away myself. I don't really like the idea of counting on them to take care of this.
Posted on 1/29/11 at 12:24 pm to TigerDeBaiter
Hi, I am a Residential Construction lender so I know exactly what you are talking about, first off if your LTV (loan to value) is over 80% which causes you to have a monthly MI premium you cant waive the escrow. If not you can waive the escrow, but as the guy stated you usually have to pay .25% of the loan amount because as he stated the bank still has to pay employees to monitor the accounts as the bank is the leinholder and have to make sure that your insurance is current at all times incase of a loss. The taxes at closing should have been based as land only, so If they collected as improved property that was incorrect. and you did request a refund which would have happened anyways at analysis time. The escrow analysis is ran once a year at that time you are either issued a refund of over collection or sometimes your payment will increase due to either insurance or taxes going up. Call your local tax collector and get an estimate on improved taxes home and land and have them fax it to you and forward to your servicer and they will adjust your payment. I can tell you that your payment will go up as the taxes will be alot more based on improved property rather than land only. The escrow account works well if you are not great at saving money. Ex. taxes due in December always and if you didnt save due to not having an escrow account you will have to pay out of pocket right at Christmas time. Escrowing is much safer if you are not good at saving.
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