Escrow Amounts Collected

[asylum23]

What is the name of your state? NV
I know that lenders are only allowed a certain amount to be held in escrow. My question is, is it their responsibility to keep track of these amounts and adjust them or issue refunds when necessary?

Our company only pays out $930 total on our behalf in taxes each year, it is paid quarterly. So that equals $77.50 per month. The amount of our payments added to escrow each month is $115. Right now there is $1,000 just sitting in our escrow account that they obviously gain interest on. I have sent them qualified written requests to have them refund some of the money, which they do at that point, but they never lower our payments so it always ends up building up.

Isn't it their responsibility to keep tabs on this? Is this required by law? Thank you.

[seniorjudge]

Originally Posted by asylum23

What is the name of your state? NV
I know that lenders are only allowed a certain amount to be held in escrow. My question is, is it their responsibility to keep track of these amounts and adjust them or issue refunds when necessary?

Our company only pays out $930 total on our behalf in taxes each year, it is paid quarterly. So that equals $77.50 per month. The amount of our payments added to escrow each month is $115. Right now there is $1,000 just sitting in our escrow account that they obviously gain interest on. I have sent them qualified written requests to have them refund some of the money, which they do at that point, but they never lower our payments so it always ends up building up.

Isn't it their responsibility to keep tabs on this? Is this required by law? Thank you.

They do not do a very good job on keeping track of this stuff; writing letters and sending them certified mail return receipt requested asking for your overpayment is about the only thing you can do.

[HUD-1]

Section 10: Limits on escrow accounts
Section 10 of RESPA sets limits on the amounts that a lender may require a borrower to put into an escrow account for purposes of paying taxes, hazard insurance and other charges related to the property. RESPA does not require lenders to impose an escrow account on borrowers; however, certain government loan programs or lenders may require escrow accounts as a condition of the loan.

During the course of the loan, RESPA prohibits a lender from charging excessive amounts for the escrow account. Each month the lender may require a borrower to pay into the escrow account no more than 1/12 of the total of all disbursements payable during the year, plus an amount necessary to pay for any shortage in the account. In addition, the lender may require a cushion, not to exceed an amount equal to 1/6 of the total disbursements for the year.

The lender must perform an escrow account analysis once during the year and notify borrowers of any shortage. Any excess of $50 or more must be returned to the borrower.

[asylum23]

I see the once per year analysis should stop it. I don't know of my company doing this, it's ASC, America's Servicing Company. I did send them a qualified written request letter though. I did this once before and you would think they would have lowered the amount required each month in escrow, but that never did change.