Escrow question.

[Egnever]

Refinanced a year and a half ago. When I refinanced my escrow was set up so that it went negative at one point during the year but then at the end of the year was at a 0 balance.

In the middle of the first year of the loan it was sold to another company.

They ran a new escrow analysis after they took over and are now claiming a shortage because the escrow account goes negative during the year.

Is this not changing the terms of the loan as the lender I made the loan with had no issue with the escrow going negative during the course of the escrow.

To further complicate things the escrow from the original lender missed a tax payment in its projection. So the projection does not show a negative balance but the actual balance does. Again leaving the escrow account with a 0 balance at the end of the year.

As I understand it escrow is allowed to be set up to avoid any shortfall but is not required to be.

To further complicate matters in the course of the transfer they paid the wrong amount to my home owners insurance which promptly canceled my coverage. Where that payment falls makes a difference in how much the account goes negative during the year. So my payment for hazard insurance shifted back two months and actually went down since they ran the analysis. which actually completely changes the balances through the loan.

to sum up when i refinanced my escrow was set to exactly cover my escrow payments leaving 0 balance at the end of the year. The new company took over the loan and realized the escrow went negative during the year and after initially wanting that negative balance plus a cushion has since waived the cushion but still wants the shortage.

I am curious what my options are here?

I think at this point I have to have them redo the escrow with the new payments and then just live with paying the new shortage but it bends my melon to do that. In the end it seems to be a mistake on my initial mortgage companies part but I also find it irksome that they accepted that setup hell dictated it to me really and despite the fact that none of my actual payments changed in fact one of them went down the company that took over the loan wants more cash.

[Phoenix61]

1. I know my escrow is not allowed to go negative

Why would the loan company want to pay out of pocket to cover my insurance/property taxes.

[PoindexterOglethorpe]

2. Oh, dear.

You are not going to win here. The escrow going negative is going to make the company handling your mortgage very nervous. You will need to increase your payments enough so that the escrow does not go negative. Hopefully that's only ten or so dollars a month.

You might want to try to have a conversation with a real person at your current loan company.

I know, this is all difficult and tricky.

Not that my experience has any bearing on yours, but I've been rather surprised that since I bought my current home in 2009, the mortgage payment has varied wildly. Originally it was about $100/month less than my rent payment. Then, apparently because of various things that needed payment, it jumped by more than that $100. Over the years it's gone up and down. Recently I found a different insurance company and saved a lot on my mortgage insurance, saving me about $20/month on my mortgage payment.

I've resigned myself to the notion that I will never know exactly what I'll be paying. At least, as I often tell people (and this is true) I can afford my mortgage.