Escrow Analysis

Your mortgage escrow is an account set up to pay your real estate property tax and applicable insurance premiums on time each year. Each month as part of your mortgage payment, we set aside a certain portion of your payment for these bills in advance of the due date. We use the money in this account to pay your real estate tax, homeowner’s insurance premiums and if applicable, other insurances, when the bills come due.

Each year we analyze your account, reviewing any changes in the amounts to make sure we are collecting an appropriate amount to pay these bills for next year.If there is too little in the account or the billed amount goes up, we need to make up the difference by increasing your payment. If there is too much in the account or the billed amount goes down, we need to send you a refund.

Each year in September, you will receive the following statements in the mail or in your coupon booklet with Escrow Account information:

Annual Escrow Account Disclosure Statement Account History which shows the activity that occurred this year in your account. This includes payments of your real estate tax, hazard (our word for Homeowner’s Insurance) and your mortgage insurance, if applicable.

Annual Escrow Account Disclosure Statement Projections for the Coming Year which shows the balance in your account and whether or not there will be sufficient funds for us to pay your future tax and insurance bills.

Frequently Asked Questions on Escrow Analysis

Click on the questions below for answers to our most frequently asked questions.

If you have a question that isn’t listed here, please feel free to e-mail us or contact someone for more information. We will respond as soon as possible.
All questions are good questions.

All questions are good questions!

Why did my payment decrease even though I have a shortage?

A decrease in this year’s payment even though you have a shortage means that this year’s shortage is less than last year’s shortage.

If you had a shortage at escrow time last year, it is now paid in full. Therefore your payment should decrease by the amount assigned last year to make up last year’s shortage. If you have another shortage this year, the new shortage amount is reflected in your new payment.

Why can’t I apply the surplus to keep my payment the same?

We cannot adjust your monthly payment by putting substantial amounts into escrow. By law, any increase must be remitted on a monthly basis. However, you may return the funds to your escrow account to protect you against future shortage. To do so, endorse the enclosed surplus check with a written explanation of your wishes. The return of your surplus will NOT change your monthly payment.

How will this affect my EFT (Electronic Funds Transfer) payment?

Your payment will adjust automatically to the new amount. Any additional funds you advance monthly toward your outstanding principal balance will not be affected. If you’d like to make changes due to an increase in your October 1 escrow payment, please contact us.

Why is my refund check different than the analysis?

If you had any late charges or outstanding balances due to McCue Mortgage, those charges were paid and the remaining balance of your refund returned to you.

Why did my mortgage payment increase, if I have a fixed rate loan?

A fixed rate means the principal and interest payment on your loan will never change. However, your monthly mortgage payment also includes an escrow payment for real estate taxes and insurance premiums, which do change periodically. A change in taxes and/or insurance will affect the escrow portion of your total monthly payment, thereby increasing your total monthly mortgage payment.

Why does McCue Mortgage have a cushion?

Federal law allows mortgage lenders to protect borrower’s escrow accounts by collecting a maximum of 2 months of mortgage escrow payments. With the current increases in taxes and insurance, the cushion can protect your escrow account from an overdraft.

If my taxes for this year are ______ amount, why is my new payment so much more?

Escrow expenses may also include: the escrow cushion to protect your account, homeowners’ insurance premiums, forced/placed hazard, fire, or flood insurance, and private mortgage insurance (PMI) if these insurances are applicable.

Can I pay off the escrow shortage amount?

Yes!! You must send the shortage amount in prior to September 15th to avoid the October 1st increase. Paying the shortage upfront will NOT reinstate your previous payment amount but will generate a reanalysis of your escrow.

Interested in know how you can make a payment? Click here for mortgage payment option information.

Why is my increase greater than the shortage amount?

If you have incurred a shortage, your property tax and/or homeowner’s insurance has increased. We must increase your monthly escrow payment to collect for the higher amounts as well as the shortage.

Why do I have a shortage?

More than likely, your property tax and/or homeowner’s insurance have increased.

Why did I get a refund last year, but obtain a shortage this year?

Every year we project next year’s tax and insurance bills from the amounts paid in the current year. We can’t always predict if the town will increase taxes or if your insurance expenses will increase due to a claim on your policy. As a result, when the bills come in, we may not have collected enough money in your escrow account to cover the increase. This results in a shortage regardless of a refund the year before.

If your escrow account has not been analyzed in the last 12 months, you may have been paying too little for your tax and insurance amounts for some time. For more information and directions on how to read your statements, please see the top of the page for specifics on your McCue Mortgage Escrow Statements.

Why is my surplus being refunded? Why not leave the surplus in my escrow account?

Federal law requires that any overage of $50.00 or more be returned to the customer.