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Personal Finances / Buying or Selling a Home
|Subject: Re: Escrow items during refi||Date: 1/25/2013 3:22 PM|
|Author: crackdclaw||Number: 124597 of 128456|
Agree with Dave, your Loan Officer is really poor at communicating. Or lazy. Here's some info that may help.
There's a total of about $3100 being added to the principal of the loan. $1577 of that is an item labeled "Property taxes due to county". That amount sounds like the right number for my semi-annual tax bill. Why is that being added to the principal? Shouldn't that either come out of the existing escrow account or out of my pocket at closing?
Taxes must be due soon, or there would not be a seperate line item for taxes due county. If taxes were not due soon, the money would be collected in the new escrow account being established. Title companies are not able to record a new mortgage at the court house if R.E. taxes are due. In this case it looks as if the title company established a line item to show they are collecting taxes and they (not the bank) will be making the next tax payment to the county.
Further down the statement there's a section called "Reserves Deposited with Lender". One of the items there is 4 months of homeowner's insurance. Then there's another item for $525 for 2 months of property taxes, and a credit of $141 for "Aggregate Adjustment". Those three items combine to be $667, which is also being added to the loan principal.
First, know that they are establishing a new escrow account. We can talk a bit further down about what is happening with the money currently being held in escrow for taxes and insurance.
Four months of homeowner's insurance would have me guessing that your homeowner's insurance was renewed in the last 2 or 3 months. If it was due in April, they would have been collecting about 12 months of insurance. Two months of R.E. taxes being collected, this is because the title insurance company is going to pay what's due now.
Aggregate Adjustment is Federal Regulations. The bank wants to hold more money in escrow than the government allows, the adjustment is reducing what the bank would prefer holding.
These just sound like more escrow payments, why are they being added to the principal?
This is a different question, the Loan Officer was probably working under the assumption that you didn't want to bring money to closing. In that case he made the new loan large enough to cover all closing costs and prepaids. Escrow money is pre-paying for taxes and insurance that will be due in the future. Perhaps the Loan Officer didn't communicate well, or, was lazy.
And why more tax payments? Weren't those covered in the $1577 above?
The $1,577. covered what's due now. If you pay twice yearly, they will be due again in 6 months. The escrow account will need to collect 2 months of taxes at closing as you will probably only have 5 monthly mortgage payments before taxes are due again.
The only other significant fee is $740 for "Title services and lender's title insurance", $425 of which is for a new title insurance policy. I don't see why I need a new title insurance policy but I'm not going to argue over a few hundred bucks.
Go ahead and argue. I wouldn't call it that, I would call it taking 5 minutes to make a $100 or so. You should see if they can re-issue the orginal title insurance policy. You may not need a new policy, but just a reissued one.
I guess I should be getting a check for the balance of whatever is in the existing escrow account, but it seems like that should be used to cover the new escrow items rather than increasing the loan amount. What am I missing?,
What I'm missing is who was the past loan with? I think previously you posted that it was with PNC. If that's the case, when PNC gets paid off they will refund the escrow they are holding. If Chase had the original loan, ask them what they are doing with current escrow. The bank I'm with will apply the escrows of the current loan to the balance of that loan, reducing the payoff amount.
Email the loan officer and tell him to give you a call. If he doesn't call, email him and say you will cancel the transaction if you don't have your questions answered.
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