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Old 12-23-2013, 09:42 AM
 
Location: Raleigh NC
24,987 posts, read 14,372,950 times
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by the way, going back to the OP ....

the mortgage lender has no idea who will be the eventual servicer of your loan. This is why they can't speak to what website you'll go to. You'll be provided a payment coupon at closing just in case the paperwork and account setup isn't done by the time your first payment is due - but this is an extreme rarity these days.

If you're closing mid-January, you'll "pay" for the rest of January at closing. Then you owe nothing Feb 1, but will pay in arrears for February on March 1.

My mortgage was originated by First Citizens Bank and then sold off. Originally, Countrywide was the servicer, so it is now serviced by Bank of America. I can go online to Bank of America to schedule autopay and see other account activity.
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Old 12-23-2013, 06:26 PM
 
Location: NC
661 posts, read 1,540,602 times
Reputation: 179
Quote:
Originally Posted by BoBromhal View Post
by the way, going back to the OP ....

the mortgage lender has no idea who will be the eventual servicer of your loan. This is why they can't speak to what website you'll go to. You'll be provided a payment coupon at closing just in case the paperwork and account setup isn't done by the time your first payment is due - but this is an extreme rarity these days.

If you're closing mid-January, you'll "pay" for the rest of January at closing. Then you owe nothing Feb 1, but will pay in arrears for February on March 1. My mortgage was originated by First Citizens Bank and then sold off. Originally, Countrywide was the servicer, so it is now serviced by Bank of America. I can go online to Bank of America to schedule autopay and see other account activity.
Thx for answering my question on "sevicing". So what you are tell him is: I don't need to bother my LO with more question on servicing aspects. yes, she said she has no idea and that CertusBank is not into servicing. So this Payment coupon is basically instructions on where to send payment etc right?


On the other aspect of escrow waiver: I was told I have to pay qtr of a point. That's a good 600 bucks So, I said no thanks escrow is fine...
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Old 12-23-2013, 07:09 PM
 
Location: Texas
44,252 posts, read 61,341,541 times
Reputation: 73800
What a freakin' rip off.
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Old 12-23-2013, 08:34 PM
 
Location: Clayton, NC
86 posts, read 140,050 times
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Quote:
Originally Posted by dad2jules View Post
Almost every comment was true at one time or another in the past. The relationship between escrow waiver and rates is that there is a "charge" to waive escrow at any LTV. For example if your rate with escrow has a lender credit of .5% of loan amount without escrow it will have .25% lender credit or a .25% adjustment. In the past- 2008 or earlier- you could waive it with high credit or 20% down but not anymore. Are you going to cancel escrow after closing- did you win the megamillions- about the same odds today. Lenders do not make any interest from the balance in your escrow account period- it is a violation of law.
That has not been my experience. I was able to cancel an escrow on a loan taken out after 2008 with no charges. Perhaps your company does that, but not all.
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Old 12-23-2013, 09:00 PM
 
Location: Durham, NC
523 posts, read 1,271,265 times
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Originally Posted by stan4 View Post
What a freakin' rip off.
How is it a ripoff? If interest rates were high on accounts for liquid capital where you would hold funds for paying taxes and insurance right now, I might understand your stance. They're not, though - the most you can hope for is about 1% APR on savings, and that's pushing it. Having an escrow account forces you to allocate money towards taxes and insurance, and the gain you would see on those funds if you paid those bills yourself is infinitesimal.

I'm with wheelsup on this one - pay into the escrow and enjoy your house. It's not worth worrying about before closing. If the OP wants to cancel escrow once the loan has been funded, then he/she can do it then.
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Old 12-23-2013, 09:24 PM
 
Location: Texas
44,252 posts, read 61,341,541 times
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Quote:
Originally Posted by lb27608 View Post
How is it a ripoff? If interest rates were high on accounts for liquid capital where you would hold funds for paying taxes and insurance right now, I might understand your stance. They're not, though - the most you can hope for is about 1% APR on savings, and that's pushing it. Having an escrow account forces you to allocate money towards taxes and insurance, and the gain you would see on those funds if you paid those bills yourself is infinitesimal.

I'm with wheelsup on this one - pay into the escrow and enjoy your house. It's not worth worrying about before closing. If the OP wants to cancel escrow once the loan has been funded, then he/she can do it then.
How is it a rip-off?

Uh, because it is total bullsh*t that some bank would hold your money or your rate hostage.

Infinitesimal? My insurance is $5000. My property taxes are $12000. Maybe you are richie rich, but I have been getting GREAT gains in my investments - consistently over 5% and usually way more.
To me, a grand or more isn't infinitesimal.

I don't need baby hand-holding and "forced" savings.

The op was ripped off by a lender who has no trust in him.
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Old 12-24-2013, 06:29 AM
 
Location: Wake Forest, NC
835 posts, read 3,876,400 times
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Quote:
Originally Posted by bosoxfan1 View Post
That has not been my experience. I was able to cancel an escrow on a loan taken out after 2008 with no charges. Perhaps your company does that, but not all.
My company doesn't "charge" anything- we're a broker so any related "charges" come from lender or others. It is a Fannie/ Freddie adjustment to the lender credit so its extremely widespread- some Loan Officers will tell you about it some won't. This only happens when you are buying or refinancing and NOT applicable after closing. After closing there is no fee- the OP is buying today so I am addressing those circumstances. As far as the 2008 point of reference that is the approximate time the .25% adjustment from Fannie/Freddie was implemented on all loans securitized through them. Prior to this change you could waive escrow with 20% down and a decent credit score. I understand you were able to cancel your escrow account- good for you because it is not normal and very few people can expect similar results. The OP is putting 20% down on a first time purchase and assuming they are getting a 30 year fixed rate loan in 5 years they will have a loan to value in the neighborhood of 73% without additional principle payments. It is highly unlikely that that an individual that a first time homebuyer with 20-27% equity is going to get escrow cancelled. You never know but they shouldn't enter the transaction expecting it to happen.
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Old 12-24-2013, 08:37 AM
 
Location: Cary, NC
41,290 posts, read 71,636,265 times
Reputation: 42926
Quote:
Originally Posted by stan4 View Post
How is it a rip-off?

Uh, because it is total bullsh*t that some bank would hold your money or your rate hostage.

Infinitesimal? My insurance is $5000. My property taxes are $12000. Maybe you are richie rich, but I have been getting GREAT gains in my investments - consistently over 5% and usually way more.
To me, a grand or more isn't infinitesimal.

I don't need baby hand-holding and "forced" savings.

The op was ripped off by a lender who has no trust in him.
You are a doctor, right? Or, am I mistaken? It happens.....
Banks will pucker up and kiss posteriors to get doctors' business.

Not so much for the average borrower.
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Old 12-24-2013, 11:06 AM
 
5,282 posts, read 13,510,457 times
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Quote:
Originally Posted by stan4 View Post
Find one that won't raise them.
This wasn't even brought up in our home loans.
Certainly no conversation about rate differences.
We didn't even talk about escrow until AFTER the rates were locked in.

If the op has a choice, he should not do escrow. No one should unless they are forced to or too financially irresponsible to handle their money, in which case buying a house might be a bad idea anyway.
Odds are you could have received a reduction in your closing costs equal to .25% of the loan amount (i.e. $500 on a $200k loan) if you would have opted to escrow.
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Old 12-24-2013, 12:29 PM
 
Location: Southern California
4,453 posts, read 6,430,540 times
Reputation: 2232
Offering a discount based on for an escrow account is a function of market conditions. If you get qualified without escrow and take the rate of a non escrowed account loan, you can easily get it put on. If you started with an escrowed account discount rate, you can't get it removed.

If you told you lender that you don't want escrows, they gave you a rate. You can ask if there is a different rate with escrows.

I have also seen single lenders stop offering discounts for escrow accounts, it is up to them if they need / want additional business or feel if they need to offer discounts.

To say it is a rip off, is like saying interest is a rip off. It is the cost to borrow money. If you don't want to pay for interest, cost , fee, insurance, then pay all cash. In most places, you'll still have to pay a property tax, another 'rip off' based on a value controlled by others who have bought at a higher price than you.
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