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I want to pay my own property tax and homeowner insurance. So I called the mortgage company, they said if I have been with them for more than 1 year, then I can cancel my escrow account. However after sending them a letter, they told me that the LTV ratio has to be less than 65%. I was kind of mad, since they obviously has no fixed criteria for handling this. I have great credit score and 20% down, and the current LTV is around 70%. I know there are many new regulations in mortgage lending industry. So currently, what is the criteria for setting up and canceling escrow account required by the laws? Should the mortgage bank provide me a written document detailing the requirements for escrow account or they can just do as they wish?
What did you agree to at closing? Sounds like you agreed to escrow taxes and insurance. You probably could have opted out when you first closed, but you would have to pay additional fees for the privilege (an escrow waiver fee is pretty standard).
The bank's option to cancel an escrow account is a courtesy, not a requirement, unless it is state mandated. Everything reverts to the terms of the original loan, on your loan documents. The only requirement I am aware of regarding any escrows requires a annual review, caps how much cushion they can hold, policy for cancelling PMI must be in writing and is voluntary if before 78%.
Actually my loan was not with this bank initially; it was sold to them 1 month after closing. The original loan document did require escrow, but said nothing about when the borrower can cancel the escrow account.
Do they charge for the escrow account? I'm just wondering why you want to cancel it. Each time we've had escrow with our mortgage it hasn't cost us any extra. In fact, there was an extra cost associated with not having escrow with them.
I want to cancel escrow for my homeowner's insurance only. My loan has been sold several times. As of today, my current mortgage holder didn't get the information for homeowner's renewal and I am afraid it will not be paid on time. My loan was sold as of Sept 1 and insurance is due Oct 24.
I want to cancel escrow for my homeowner's insurance only. My loan has been sold several times. As of today, my current mortgage holder didn't get the information for homeowner's renewal and I am afraid it will not be paid on time. My loan was sold as of Sept 1 and insurance is due Oct 24.
Let them know when it is due. That should be plenty of time for them to get it taken care of.
Agree, plenty of time. You can get a copy of the invoice ad fax it to the new lender if you like. May let you sleep better. I've even seen them pay two different insurers at the same time when the homeowner replaces a policy, but didn't notify the lender right away.
I want to pay my own property tax and homeowner insurance. So I called the mortgage company, they said if I have been with them for more than 1 year, then I can cancel my escrow account. However after sending them a letter, they told me that the LTV ratio has to be less than 65%. I was kind of mad, since they obviously has no fixed criteria for handling this. I have great credit score and 20% down, and the current LTV is around 70%. I know there are many new regulations in mortgage lending industry. So currently, what is the criteria for setting up and canceling escrow account required by the laws? Should the mortgage bank provide me a written document detailing the requirements for escrow account or they can just do as they wish?
It is possible that lender gave you a lower interest rate to do escrow which is why it is hard to remove.
Last edited by thelopez2; 10-02-2015 at 06:10 PM..
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