Escrows Gone Wild!
July 29, 2010 7:00 PM Subscribe
Magical Escrow! Why am I being charged so much?
posted by anonymous to work & money (4 answers total)
Three months ago, I refinanced my home here in Massachusetts. The monthly escrow for taxes/insurance was estimated much too low to cover the fees and I got a notice from my mortgage company that the escrow would be need to bumped up.
While this is alone is cause for gnashed teeth, my escrow was in such a low state that it's now in the hole after paying the second quarter property tax (approximately $1600). In the notice, my mortgage company - PHH Mortgage if it matters- informed me of the new monthly escrow increase but also of a deficit to the tune of $600. There was about $1000 in the escrow at the time of taxes so I understand where the $600 number is coming from. What I don't understand is why the mortgage company added another $1600 to the deficit.
In the notice, the mortgage company stated that in order to recoup the deficit, the escrow need to have the negative balance AND the exact amount of of my property taxes. The notice gave me until August 31st to take care of the entire $2200 "deficit" or the amount would be parceled out to the next 12 months of my monthly payment. The mortgage company did, in fact, pay the second quarter taxes and the monthly escrow increase should provide for the third quarter taxes. As far as I can tell, this $1600 is not a penalty fee. It's mystery.
I have tried to talk to my mortgage company but could find no one with answers. I went up and down the chain of command but they were automatons.
So let me ask y'all. Why am I on the hook for this extra $1600 in quarterly taxes?