We conduct an annual escrow analysis for your loan to make sure enough funds are being collected to pay your annual insurance premiums and, if applicable, property taxes.
- Escrow Analysis: This is a yearly review comparing the amount collected vs. what was actually paid for your taxes and insurance. We then project what we expect needs to be paid in the next 12 months based on the actual payments over the past 12 months.
- Minimum Balance: This is also known as a cushion and calculated as no greater than one-sixth (1/6) of the estimated total annual disbursements from the escrow account. This is typically equal to 2 monthly escrow payments. This cushion helps ensure your escrow balance doesn't go negative.
- Shortages: This happens when the projection shows there will not be enough in your account to meet the minimum balance requirement. To fund the shortage you will need to make up the shortfall through a lump sum payment or higher future monthly payments.
- Surpluses: When the projection shows there will be more in your account than the minimum balance requirement, a surplus is created. When this happens, you’ll get a refund or lower future payments.
- How You’ll Be Notified: You’ll receive a notice of any changes to your escrow payment in the mail. You should take the time to review the analysis so you understand what's changed.be
If it's the first time you've received an escrow analysis, you need help understanding the analysis or have additional questions, please contact us via email escrow@automhatic.com or call (888) 226-8929.
You can also find additional information on the CFPB website.