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Okay so I have an FHA loan and it eventually was purchased by FHA, so now my loan servicing company is NationStar. To be honest they are the worst company ever, I have many stories, but for this instance I'll pick one. I, of course, send money to them for my escrow account to pay my interest and my taxes.
Well after they purchased my loan they changed the date that they paid my local taxes. Before with the previous mortgage servicing company it would be paid in August and December, but with NationStar it is paid September and December. Because they moved the payments so close together it caused my escrow account to get too low and now they have tacked on more money to my monthly mortgage bill to prevent my escrow from going under the legal minimum amount.
I was upset about this and so I called them and asked if my taxes could be paid at a more spread out pace but the customer service representative stated that they make automatic payment for all of their mortgages at the same time and that there is no way they can manually change my payment. I wanted to know is it legal for them not pay the taxes the way I request them to? Is this a common situation or does it sound like they are going trying to play hard ball with me?
With an escrow account I do not think you have a choice. Assuming your taxes and insurance stay the same, your payment will eventually go down when they recalculate and you end up with an overage. The other option is to ask them not to have an escrow account, like the previous poster suggested. In that case they will refund you the money currently in your escrow account and you have to pay and budget for your insurance and taxes yourself. Whether or not you have to use an escrow account largely depends on the requirements of the company servicing the loan. Last year I asked Bank of America if we could eliminate the escrow and they reviewed some things and said no problem. They mailed me a check for the balance and now I pay my own taxes and insurance.
Meatkins, part of your problem is how MD bills and collects property taxes. The Counties don't send out the tax bills until Sept. 1, due on Oct. 31. If you have chosen the 2 payment option (most have) the second payment is due Dec. 31. Your first payment is more since there is a service charge tacked on by the County which is paid in the first payment.
Also, if your County has any special assessments in addition to the property tax those are paid in the first installment. Calvert County has a solid waste assessment on its tax bill while North Beach has that and sewer/water benefit assessment. The upside to the special assessments are that they are tax deductible when structerd like that instead of billed separately as a regular service billing.
For everyone asking, I can't close the escrow account because it's FHA. They don't allow that on an FHA loan.
To NBP thank you for the clarification.
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