What is my escrow account and why does it have a shortaqe / deficiency / surplus?
Your escrow account is maintained to pay all escrow (tax and/or insurance) bills associated with your home. These bills include property taxes paid to one or more entities as well as insurance, which may include mortgage insurance and flood insurance in addition to hazard insurance. GreenPoint Mortgage Funding, Inc. calculates your escrow deposit according to Federal guidelines set forth in the Real Estate Settlement Procedures Act Regulation X: Final Rule. We use the amount of the most recently disbursed tax and/or insurance bills since the next year’s bill amounts are usually not available until shortly before they are actually due. The sum of all your escrow obligations is divided by 12 to determine the monthly escrow deposit for the following 12 months. In most states, the Final Rule also allows for the collection of a two-month cushion in order to prepare your escrow account for the increases in taxes and insurance as well as the possibility that a payment might be received late.
Related Questions
- f there is a surplus in the escrow account and the borrower is in default, may the servicer retain the surplus as payment towards the amount in default?
- What money must be paid into an ESCROW account? And For what purpose can money be paid out from the ESCROW account?
- What is my escrow account and why does it have a shortaqe / deficiency / surplus?
