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Hi, I purchased a new construction home in December, 2013. We took out a mortgage with TD and put down 20%. At time of closing, no deposit was made into an escrow account. Since then, I've made to tax payments myself to my town.
My question is this: since I currently have no funds in an escrow account with TD, is there any chance they could come back to me in a few months (or years) and demand that I deposit into an escrow account? At closing, I set aside $5,000 that would have gone into an escrow account but if TD is never going to make me fund it then I will use that money for other things (I separately save for my property tax each month too right now). I'm just worried that maybe for new constructions TD waits a year until it is properly assessed before they require escrow.
What does you truth in lending and good faith estimate say? Both address where escrow are required. Also, can you confirm what kind of loan you had? Was it a construction perm? Construction perm have a 2nd closing where escrow are collected - that would be in your loan agreement.
What does you truth in lending and good faith estimate say? Both address where escrow are required. Also, can you confirm what kind of loan you had? Was it a construction perm? Construction perm have a 2nd closing where escrow are collected - that would be in your loan agreement.
My loan was not a construction loan, it was a traditional loan (it was a spec house new construction). My truth-in-lending disclosure statement has $0 for "estimated taxes + insurance (escrow). Does this mean there's no way TD can force me to set up escrow later (unless I was late paying my taxes myself)?
I closed recently n a loan that does not have an escrow account, but there is a small print notation that If I become delinquent in taxes or property insurance then they will establish an escrow account and I will pay to fund it--it comes first off a monthly payment. I can give them a check to fund it fully for a year in advance or add to the monthly payment the amount they request.
My loan was not a construction loan, it was a traditional loan (it was a spec house new construction). My truth-in-lending disclosure statement has $0 for "estimated taxes + insurance (escrow). Does this mean there's no way TD can force me to set up escrow later (unless I was late paying my taxes myself)?
No, as you were told, as long as you are current, they cannot force escrows upon you.
But I have observed a new trend that's mildly amusing. First 95% of the traditional conventional loans these days require a 20% down payment for a waiver of escrows. It is customary to charge an additional 1/4 point in fees (points) for the homeowner to pay their own escrows......ie, you get to pay for the privilege of managing your own money......but I have noticed that some banks (especially those that do what we call service retained - they collect your payment) are not requiring escrows, especially if the home is in a state that mandates interest be paid on the escrow account. So, I wonder if you were somehow charged for this without being given the option for the lower fee loan (there is no way you would ever know, it's not typically a disclosed fee unless you specifically ask for it).
There have been a ton of articles lately discussing the income from servicing loans is not what it use to be and many banks are selling off their portfolios. Administration of escrows is still a huge cost, especially with new laws in place. Extra bodies are needed, more compliance regulations to be met. If they can't make interest on the funds in their accounts.....well, it could be more beneficial to charge the customer more in the beginning and kick the bookkeeping back to the homeowners with the best credit scores.
No, as you were told, as long as you are current, they cannot force escrows upon you.
But I have observed a new trend that's mildly amusing. First 95% of the traditional conventional loans these days require a 20% down payment for a waiver of escrows. It is customary to charge an additional 1/4 point in fees (points) for the homeowner to pay their own escrows......ie, you get to pay for the privilege of managing your own money......but I have noticed that some banks (especially those that do what we call service retained - they collect your payment) are not requiring escrows, especially if the home is in a state that mandates interest be paid on the escrow account. So, I wonder if you were somehow charged for this without being given the option for the lower fee loan (there is no way you would ever know, it's not typically a disclosed fee unless you specifically ask for it).
There have been a ton of articles lately discussing the income from servicing loans is not what it use to be and many banks are selling off their portfolios. Administration of escrows is still a huge cost, especially with new laws in place. Extra bodies are needed, more compliance regulations to be met. If they can't make interest on the funds in their accounts.....well, it could be more beneficial to charge the customer more in the beginning and kick the bookkeeping back to the homeowners with the best credit scores.
Just an observation, nothing I can prove.
interesting observation, I do live in a state which requires interest on escrow (MA)
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