‎03-15-2013 09:58 AM — edited ‎03-15-2013 09:58 AM

Bay_Man wrote:

If you want, you can get them, there may be a support person, you call them. However, in the long run, it helps you and better to keep additional money in escrow account. It may also get some very low interest,b ased on my cenlen, but not substantial. Last time, property tax ran over escrow amount and the lender changed extra fees. Hence, I added $1000 to keep away from extra charges!

I like the idea of impounding as I do not need to run around last minute run for property tax.

The lender can make you pay back the shortage if the required payouts are more than they originally estimated (actual shortage where your balance went to zero or negative, or shortage if your balance is less than their required minimum of up to 1/6 your annual payouts). They should have paid the full amount, even if you didn’t have enough money in your escrow account. They usually give an option of paying your shortage as a lump sum, or by increasing your payment over 12 months. I don’t think they are allowed to charge you fees if the shortage is caused by their own calculations based on old estimates. I know for sure that if the lender doesn’t pay the bill on time and you have been paying all of your own payments to the lender on time, then the lender is supposed to pay any late fees, interest, or penalties out of their own pocket (the fee/interest/penalty should not come out of your escrow balance, because it was the lender’s fault that the payment was late). Even if your balance went to zero or negative and they had to pay part of the bills out of their own pocket temporarily, I think the most they should do is make you pay immediately to reimburse them.

If you don’t have an escrow account at all and the lender has to pay an insurance bill or taxes because you didn’t pay them yourself, then I think the lender can demand immediate re-payment of the amount they paid out, or they can add it to the loan balance and charge interest the same way as they would for your original principal.

[I am not an expert, just a consumer. I did have trouble with one lender not paying my bills on time from my escrow, and they paid the penalties from their pocket. All statements should of course be verified with your lender and/or RESPA ( Real Estate Settlement Procedures Act, which is some laws/rules regarding mortgages).]