Escrow Shortage - Paying lump vs. paying monthly

[Belinda Danford]

I am still in shock my house payment is past 20 years has been $525 here or there 10 or $20. Because of escrow. Now we change insurance companies this would have nothing to do with what just happened but all of the sudden we have a $3,000 shortage that will raise our payment from $525 to $787 a month!! If we pay the $3,000 it will still go up to $570 a month! HELP I do not understand this after being a homeowner for 32 years! I look at the insurance and hardly any difference at all either there or on taxes I think we are getting the big screw in the back we need help!!

[FalconheadWest]

Originally Posted by Belinda Danford

I am still in shock my house payment is past 20 years has been $525 here or there 10 or $20. Because of escrow. Now we change insurance companies this would have nothing to do with what just happened but all of the sudden we have a $3,000 shortage that will raise our payment from $525 to $787 a month!! If we pay the $3,000 it will still go up to $570 a month! HELP I do not understand this after being a homeowner for 32 years! I look at the insurance and hardly any difference at all either there or on taxes I think we are getting the big screw in the back we need help!!

It sounds like your escrow account has been short for quite a while, but they haven't told you. You need to get a record of what they paid for your taxes each year and also your home owner's insurance each year.

$3000 doesn't just disappear. If you've been in the house for more than 20 years, more than likely your taxes are delinquent in some form or fashion because you have to assume your property's value has gone up over the years beyond $10-20.

[Lacerta]

Originally Posted by Belinda Danford

I am still in shock my house payment is past 20 years has been $525 here or there 10 or $20. Because of escrow. Now we change insurance companies this would have nothing to do with what just happened but all of the sudden we have a $3,000 shortage that will raise our payment from $525 to $787 a month!! If we pay the $3,000 it will still go up to $570 a month! HELP I do not understand this after being a homeowner for 32 years! I look at the insurance and hardly any difference at all either there or on taxes I think we are getting the big screw in the back we need help!!

A $3000 shortage on a house in that price range (assuming you didn't make a huge down payment to get the payment down that low) seems wrong to me. I would have had to not pay any escrow at all for more than 2 years in order to get that far behind, and my payment is around $750/month. So in your price range, it would likely take more like 3 years.

Do you have online banking for your mortgage account? Has it been in the negative for YEARS? Because that is what this would take. In fact, if you've been making payments into escrow, it would have been in the negative for a decade to reach this point, gradually getting worse.

Now, if you did make a big down payment to get your mortgage this low, or you live in an area where property taxes are 3% or higher (are there such areas?) or insurance is crazy high, and $3000 is less than 1 year's taxes/insurance, then this becomes a lot more feasible, and could have happened over the course of just a few years.

I would suggest a call to your lender to discuss right away. The statement that says you have the shortage should include a number to call if you have questions. I would suggest NOT calling that number, at least not first. Call the main number for customer support for your bank first and find out whether the notice and phone number on it is even legit. Maybe it is a scam.