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What causes an escrow shortage or overage?

April 26, 2017causes escrow overage shortage

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What causes an escrow shortage or overage?

1 Answer

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Shortages usually are the result of an increase in the property taxes and/or insurance premium(s)or payment of a supplemental (unscheduled, additional) tax bill. Occasionally, they occur when payments are received for an amount less than the full payment required for the escrow portion of the payment. Overages usually are the result of a decrease in the amount of the taxes and/or insurance premium. Lowering of taxes or insurance may be the result of lower rates, allowance(s) for exemptions (homestead, over 65, disability), or overpayment of the escrow portion of the payment.