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Hello, I need help my escrow just went up this year 200.00 now I’m up to 1390.00. I’m from Rogers AR my mortgage holder is CITI MORTGAGE my husband lost his job in may 09 we can’t afford this amount. What are my options? Will the bank work with me instead of foreclosure. What can I do?
P.S MY TAXES OR HOMEOWNERS DIDNT GO UP I THINK IT HAS TO DO WITH
P.M.I (PERSONAL MORTGAGE INSURANCE) BECAUSE ONLY BUT 10% DOWN
NEVER BEEN LATE! We got mortgage 1 1/2 years ago at 950.00 month
30 year regular at 5.5%
PMI is set at the beginning of the loan and cannot change so the increase has to do with either your property taxes going up or your homeowners insurance going up. Not much your bank can do to help since they do not set the tax rate in your state.
You could contact your state and dispute the property value which might lower your taxes. Also, shop your home owners insurance, you might be able to find a new insurance company offering better rates which could help to reduce your payment.
When you take out a mortgage, I believe that lenders require you to pay up to a year's worth of stuff in advance that goes in to escrow (i.e. hazard insurance, taxes). So you will see it as a "closing cost" instead of building it up over the year based on the escrow low-water mark which is what happens on subsequent years. This will make your monthly mortgage payment higher after that first year. At least this is how my mortgage was done.
Sorry to hear your predicament. Same thing happened to us, and it stings, but we're getting by...
Seems like a bait and switch thing almost that they give you a lower payment initially to get you in the house knowing that the escrow is most likely going to be short and your payments will increase in subsequent years. I can certainly see where they have incentive to lowball property tax "estimates" and figure it'll all get worked out later once you're in the loan..... Quite clever really, but it sucks.
It can hit you double hard if you buy new construction. The home value may be based on "Raw Land" and can take several years of increases to get the escrow amount where it should have been in the beginning.
Location: Stuck on the East Coast, hoping to head West
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You might want to check how much the lender is keeping in escrow. There is a limit to how much they keep as a "cushion". In some situations, you don't have to have an escrow account--I don't use escrow anymore. I started paying my own taxes and insurance after realizing my lender was keeping over $500 floating in my account. Money that they weren't required to pay me any interest on. And that cushion kept going up every year.
The RESPA statute and regulations do not require the lender to maintain a cushion. However, since 1976 the RESPA statute has allowed lenders to maintain a cushion equal to one-sixth of the total amount of items paid out of the account, or approximately two months of escrow payments. If state law or mortgage documents allow for a lesser amount, the lesser amount prevails.
There is a lot more information here. Check it out.
Hello, I need help my escrow just went up this year 200.00 now I’m up to 1390.00. I’m from Rogers AR my mortgage holder is CITI MORTGAGE my husband lost his job in may 09 we can’t afford this amount. What are my options? Will the bank work with me instead of foreclosure. What can I do?
P.S MY TAXES OR HOMEOWNERS DIDNT GO UP I THINK IT HAS TO DO WITH
P.M.I (PERSONAL MORTGAGE INSURANCE) BECAUSE ONLY BUT 10% DOWN
NEVER BEEN LATE! We got mortgage 1 1/2 years ago at 950.00 month
30 year regular at 5.5%
Thank you
MRS AR
You need to call your lender and demand answers - which they're not going to willingly give you. Actually, your monthly mortgage statement should have all that information spelled out clearly.
All we can do here is make educated guesses.
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