Important:

The amount of your tax and insurance payments is determined by your TAXING AUTHORITY and INSURANCE COMPANY. CUMC takes responsibility for administering the payment of your tax and insurance bills; however, the payment liability is still your obligation.

What is an escrow analysis?

An escrow analysis is performed annually to ensure the monthly escrow payment will be sufficient to pay escrow items, such as property taxes and homeowners insurance, as they become due. The escrow analysis identifies any overages and/or shortages that may be occurring in the escrow account after disbursements of escrowed items. The monthly escrow payment will be adjusted based on an increase or decrease in the amount of the item(s) for which the lender is escrowing.

Why did my payment increase?

The analysis is based off of the most recently paid bills from your escrow account. The most common cause for an increase is due to an increase in your real estate taxes or your homeowners insurance.

How can my monthly payment increase when I have a fixed rate mortgage?

The increase is due to the escrow portion of your payment, not the principal and interest. The principal and interest is the portion on your mortgage note that is at a fixed interest rate and that never changes, nor do the terms of your mortgage note.

What is an escrow "cushion?"

The cushion is funds paid into the escrow account to cover unanticipated disbursements or increases in disbursements due to rate increases, higher assessments or other factors. Section 10 of the Real Estate Settlement Procedures Act (RESPA) allows lenders to collect and maintain up to one-sixth (2 months) of your total disbursements in your escrow account at all times, unless otherwise specified by your mortgage document or state law.

What is an escrow "shortage?"

If the balance in your escrow account ever falls below the targeted reserve balance allowed, there is an escrow shortage. The shortage is divided by 12 and added to your payment for the next 12 months.

If I have a shortage, may I pay it separately?

You are required to pay the minimum monthly installment including the shortage every month. You can remit additional funds with your monthly installment, or send a separate check, to pay off the shortage. If you choose this option, please indicate that you would like these funds used for this purpose. After the full escrow shortage is collected, your escrow payments will return to the required monthly amount for future installments.

If you have any other questions, please don't hesitate to contact us!