Posted by jba/fl on 8/24/09 10:15pm
Msg #301542

Question re: Escrowed (impound) taxes, insurance

If one has taxes, insurance escrowed monthly, then refinances, is the escrow account always (normally) refunded within a certain time frame? Or, is it used to reduce the amount owed, ie, it will be netted out..so if there is a balance of $3,000 in the account (example), and the unpaid balance is $100,000--the new payoff will be $97,000.

I was thinking that these monies had to be returned when closing the first loan and the second loan would reestablish new impound acct. Is there a rule? regulation? law? Or is this a common occurance w/BofA for example?

Reply by desktopfull on 8/24/09 10:29pm
Msg #301545

The company can do either one. If they refund the escrow account here in FL they have 60 days to get the money to you. Most of the CW/BOA loans I've done lately, they have credited the escrow account to the payoff.

Reply by pan/nd on 8/24/09 11:15pm
Msg #301546

Desktopfull is right on...

it can go either way......

BUT

the lender SURE -AS-HE ##--better tell the borrower WHAT WAY.


Just did a BofA...where the lender took the escrow balance off the payoff balance after telling

the borrower he'd get a check for the escrow. Now, no check and borrower is furious!

BAD SCENE!!!

Reply by Linda_H/FL on 8/25/09 7:35am
Msg #301561

" lender took the escrow balance off the payoff balance after telling the borrower he'd get a check for the escrow. Now, no check and borrower is furious!"

IMO the borrower needed to step back, take a breath and think a minute...instead of waiting 45-60 days for his escrow refund, he basically got it on the spot. A full payoff with no reduction would have changed his bottom line - either less to him at end of rescission or more he'd have to bring to table if funds were due.

Also: "the lender SURE -AS-HE ##--better tell the borrower WHAT WAY."

They do - it's right in the payoff letter, spelled out - it's either deducted from the payoff amount due or there's a paragraph advising how much they're hold in escrow and when it will be refunded....and the packages I'm getting lately on refis there's a copy of the borrower's payoff letter included...for that matter they can go online and see for themselves.

JME

Reply by PAW on 8/25/09 8:04am
Msg #301564

>>> packages I'm getting lately on refis there's a copy of the borrower's payoff letter included...for that matter they can go online and see for themselves. <<<

Where can a borrower go online to see their payoff letter?

Reply by Linda_H/FL on 8/25/09 8:07am
Msg #301565

Lender's website...most can access their mortgage info

online OR get a payoff if they want.

Reply by PAW on 8/25/09 8:20am
Msg #301568

Re: Lender's website...most can access their mortgage info

Granted, the lender's website, if they have a consumer interface, will provide their mortgage info, but I don't know of any that will provide a copy of a payoff letter. You can request a payoff, targeted for a specific date, and that payoff information will be provided to the mortgagor by mail. Online, you may be able to get an 'estimated' payoff amount, but in my experience it has not be the actual payoff committed to by the lender that is provided in the payoff letter. If I'm wrong, please educate me on the current way things are done. (I'll admit that it's been a few years since I attempted to find out a payoff on a mortgage.)

Reply by Linda_H/FL on 8/25/09 8:39am
Msg #301569

When I got mine recently I could look at payoff

info or get a payoff letter (yes targeted with a specific date....to calculate interest)...it also included a per diem rate for payoffs received after the target date (in case I got to the bank a day or two later than expected)...also enabled me to add additional interest to allow for mailing time.

I'd find it difficult to believe my lender is the only one who generates these. There were several times in my former life in CT where the borrowers got their own payoff info/payoff letter and brought it to us for use at closing....so this is not new.

Reply by PAW on 8/25/09 10:29am
Msg #301578

Re: When I got mine recently I could look at payoff

Not arguing that you can't request a payoff, just that with three lenders that I've dealt with in the past, the payoff letter was mailed to me. I could not retrieve it online and download it or print it from the screen.

Reply by John_NorCal on 8/25/09 12:00pm
Msg #301588

Re: Lender's website...most can access their mortgage info

That's been my experience also Paul. The lender's website will give you a ball park figure, but even as their website (WAMU/Chase anyway) states, that is not the payoff to be used. You can request a payoff as of a certain date, and that is the figure to be used for loan closings. It has always been my experience that escrow balances are refunded after closing. If they do take off the payoff amount then so much the better, that reduces waiting time and interest charges.

Reply by PAW on 8/25/09 6:42am
Msg #301553

Typically, the funds are returned to the borrower. Some lenders, especially if it is the same lender for the current mortgage, will transfer the escrow funds to the new account. Lenders typically hold the escrow 45 days after close to ensure that no monies are due on the expiring account. So the borrower will see their funds from 50 to 60 days after disbursement of funds on the new account.

Reply by Julie/MI on 8/25/09 7:24am
Msg #301560

It used to be that the old escrow monies were refunded separately (which I think is better IMHO).

However, in the last year I AM seeing disclosures in some of the loans stating the escrow balances were being deducted from the payoff amount.

Of course the LO's never tell the borrower what is happening and that drives me batty.

Reply by NJW/FL on 8/25/09 7:38am
Msg #301562

I just had two Wells Fargo re-fis that have a document to be signed by borrower stating that they have agreed to have their escrow balance applied to the payoff balance. In my own experience 5 yrs ago, they sent me my check appr. 45 days after closing.

Reply by mswoody/fl on 8/25/09 9:38am
Msg #301574

I am sure about the rules but we just refinanced and got our escrow refunded to us and the new loan company created a new one it was worded in our refi that way

Reply by MW/VA on 8/25/09 7:25pm
Msg #301649

I believe it was a common practice for the escrow funds to be refunded 30-60 days after the payoff.
Lately, I'm seeing a lot of "payoff balance reduced by escrow fund" letters in the packages, especially with FHA. I don't know how the borrower would be able to vertify the amounts if they wanted to.
IMO it makes sense. Why factor that amount into the loan, subject to 30 years of interest for example, instead of just reducing the payoff by that amount.

Reply by ADD/NYCT on 8/25/09 11:42pm
Msg #301692

Tax and Insurance Account Page

I tell them to check with their LO, but I show them the Tax and Insurance Account doc too (Initial Escrow Account Disclosure Statement). I've seen that when they are transferring the balance, it says REQUIRED AT CLOSING, then it states the amount required, then underneath it is typed in TRANSFER FROM OLD ACCOUNT (if they are transferring it) and it shows the amount being transferred. I suppose these numbers would vary if they didn't have enough in their old account, and would include an amount impounded in lines 1001 - 1009 on the HUD, but it's a nice tip off.

If I get a Payoff Demand, at the bottom of the first page it says Total Amount Required to Release the Lien (then the amount), Less Available Escrow Balance (and the amount in the old escrow account), which is Subtracted from the Total Amount Required, and the last line is Total Amount Due. But again, I tell them to check with their LO so they will know for sure.