Q: Brothers mortgage sold and new company increased his payment $400 more a month, but he closed two years ago.
He has a finalized contract and has been paying his monthly payment. He called and they said "escrow" amount increased so they had to increase his monthly payment. "Escrow"?? He has signed final papers on his original loan.
A: Escrow refers to the property taxes and homeowner's insurance that are built into the monthly loan payment. If the taxes and/or insurance go up in any given year, the total monthly payment will go up to make up for the shortage. Both taxes and insurance are going up quickly in Florida. If you find yourself in a position where you can't pay the mortgage due to the increase, schedule a free consultation to discuss alternatives to foreclosure.
A: Yes, escrow. Escrow is simply a term that basically means money held in reserve. A mortgage payment will increase or decrease over time depending on, generally, the cost of mortgage insurance and property taxes. As the insurance costs change, the mortgage payment will change and the mortgage company will require additional funds be paid in escrow so that the company always has enough money to make the insurance and tax payments.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
