I have $5450 in escrow overage. Mortgage servicer will not refund because mortgage payments are past due. I haven’t received a straight answer from CENLAR about whether or not escrow overage can be used to pay down the past due balance to bring the mortgage current instead. Help?
You may have to request to have the escrow coverage to be refunded back to you and then make the payment to the loan.
Just call the loan servicer and ask them
Eli said:
You may have to request to have the escrow coverage to be refunded back to you and then make the payment to the loan.
Just call the loan servicer and ask them
Thanks. They won’t refund because I’m behind. They said they can’t just take my word that the funds will be used to pay the loan current. Which I completely understand. But I’m not asking them to give me the money. I’m asking them to transfer the balance to the loan. It’s my money that I overpaid…
@Torin
The CFPB requires them to refund you any surplus.
See section 1014.17(f)(2)(i)or just search the page for Surpluses
Let them know that the CFPB requires them to refund the surplus within 30 days and that you would like them to send the refund in accordance with the CFPB section 1024.17(f)(2)(i)
@Eli
Thanks. My mortgage payments are past due so they’re not required to send me a refund.
Torin said:
@Eli
Thanks. My mortgage payments are past due so they’re not required to send me a refund.
Mybad, look at section ii
“…then the servicer may retain the surplus in the escrow account pursuant to the terms of the federally related mortgage loan documents.”
They can use the overage to pay the past due amount
How do you have an Escrow overage and be behind on your payments???
Nash said:
How do you have an Escrow overage and be behind on your payments???
I guess they were charging me too much before I fell behind???
Nash said:
How do you have an Escrow overage and be behind on your payments???
Something like this could easily happen if it’s OP’s first year of ownership. Sometimes there’s a supplemental property tax (especially in CA where the taxes usually go up SIGNIFICANTLY on change of ownership due to prop 13). The supplemental bill is paid out of escrow and it’s calculated as if you will have to pay the supplemental bill in November and May even though it will only be on the first payment. The mortgage servicer calculates a new escrow target and your payment can go up by hundreds of dollars. You have to call them and explain that it’s a supplemental charge and expected property taxes were already calculated, and the supplemental bill only happens one time. This happened to me. You could easily get behind if your mortgage bill went up by hundreds from what you were expecting.
@Quin
But he is behind on payments. So was he just paying Escrow? I understand supliment. I’m wondering if the applied a payment to his Escrow instead of Princpal and Interest
Nash said:
@Quin
But he is behind on payments. So was he just paying Escrow? I understand supliment. I’m wondering if the applied a payment to his Escrow instead of Princpal and Interest
The mortgage company “saves up” your property taxes and insurance premiums for you.
It is very possible that the bank overestimated the amount of those payments, and/or those payments have not become due since OP became delinquent.
So the bank has the money to pay the property taxes and the insurance, or at least some of it, and OP has fallen behind on their principal and interest payments.
@Kim
You’re not grasping the point that if he didn 't make payments, how did his Escrow get so high? Is his taxes coming due? He need to go over his last 12 months statement and see how his payment was applied …
@Nash
Former mortgage servicer here - that’s not how it works. Honestly, most people are pretty in the dark about escrow and think the servicers just make up numbers.
Those pmts are getting made. Late or not. Funds will still go into escrow. That is what the software is picking up. There will still be too much in there. Overage. It’s all projections because who the fuck knows what your taxes and ins will be next year.
@Nash
Banks are notoriously terrible at estimating escrow.
Kim said:
@Nash
Banks are notoriously terrible at estimating escrow.
People are notoriously terrible at understanding RESPA laws.
@Nash
I was making the required payment up until now. So, the surplus was already there before becoming delinquent. Still, at this point, I don’t know that finding they misapplied the payment will help me at this point.
Escrow is in place to protect the bank’s investment regarding tax payments and insurance premiums for the property.
It is functionally separate from your principle and interest payments, and serves a different purpose.
Escrow overage can be directly refunded to you if the loan is current, but you have said that it is not.
TL; DR: No.
@Kim
Understood. However, if I was current on my mortgage, the overage would be refunded to me. Since, I’m not current, they aren’t issuing a refund. My question is since I’m not receiving a refund, can that overage be applied to the arrearage. I will still have the required minimum balance needed in my escrow account so their investment is still protected.
@Torin
How do you know it’s an overage? Do you track your property tax payments and insurance premiums and when they are due?
My property taxes are due twice annually (I don’t have escrow on my mortgage because of this kind of bs), and one is in December.
Just because there is money in your escrow account does not necessarily make it an overage.
@Kim
Their escrow analysis says there is a $5450 overage.