| What is an escrow account? |
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An escrow account is one into which funds are deposited monthly as part of your payment. The funds will be used to pay future real estate taxes, property insurance premiums, flood insurance or private mortgage insurance premiums (if applicable) and any other expenses as described in your mortgage.
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| How do you manage my escrow account? |
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SFN will pay your bills based on the information received from you, your insurance agent and your taxing authority.
At least once a year, your escrow account will be analyzed. An escrow analysis is a review of your account to determine the amount of escrow deposit needed monthly, based on the bills we expect to pay on your behalf over the next 12 months. Once the analysis is completed, an Annual Escrow Account Disclosure Statement will be sent to you with your new payment information.
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| How is my monthly escrow deposit calculated? |
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Your escrow deposit is equal to 1/12th of the total bills we anticipate paying on your behalf during the next year, plus 1/12th of any unpaid deficit. In addition, there is a minimum escrow account balance that is permitted by federal and/or state law equivalent to up to two months of your monthly escrow deposit.
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| What information is on my Annual Escrow Account Disclosure Statement? |
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Your Escrow Account Disclosure Statement provides you with projected and historical escrow activity and your current and new payment amounts, including the portion of the payment going into the escrow account. The disclosure will also provide you with an explanation of how any escrow surplus or deficiency will be handled.
Your projected escrow activity will list all the escrow deposits we expect to receive in a 12-month period, as well as list all escrow disbursements that we expect to pay from your account during the same period. The projection also lists your anticipated and required monthly escrow balance.
The historical escrow activity provides the total escrow deposits and disbursements made from your account over the last 12 months.
The activity will also list anticipated and actual escrow balance.
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| How often does SFN analyze my escrow account? |
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SFN reviews all escrow accounts at least once a year.
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| In what ways can my escrow account fluctuate? |
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Any of the following may affect your escrow payment:
- A property tax increase or decrease
- A homeowners or flood insurance premium increase or decrease
- A mortgage insurance increase or decrease
- A shortage of funds
- A surplus of funds
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| What happens to a surplus of escrow funds? |
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If your loan is not delinquent and has a surplus of $50.00 or more at the time of your escrow analysis, SFN will automatically send you a check refunding the surplus. If your surplus is less than $50.00, we will automatically credit your escrow account.
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| What happens if there is a shortage of escrow funds? |
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If your escrow account balance is less than the required balance at the time of your analysis, your escrow account will have a shortage and you will receive a Deficit Notice. The amount owed will automatically be spread over a 12-month period and added to your monthly payment. You do, however, have the option of paying your escrow shortage in part or in full. If you choose this option, your monthly mortgage payment will be adjusted accordingly.
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| How can I dispute an increase in my escrow payment? |
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In the event you believe our calculations are incorrect or you have access to better estimates from a taxing authority or insurance provider, please contact us immediately. We will use your documented information to perform a new analysis, possibly resulting in a lower escrow and monthly payment amount.
IMPORTANT: Only your taxing authority or insurance company can provide the information needed to change the amount of the bill we pay on your behalf. You must contact them directly.
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| Can I delete my escrow account? |
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Yes, if the following requirements are met:
- The loan is current.
- The current loan to value ratio (LTV) is 78% or less for an owner occupied property or 65% for an investment property.
- The escrow balance is not negative
- There have been no 30-day, or more, late payments within the last 12 months.
To waive your escrow, there is a one-time charge of $105.00. If your escrow balance is sufficient we will refund anything in excess of this amount. Otherwise, if your loan qualifies, you may send us a written request along with a check for $105.00 to:
Attn: Escrow Administration
State Financial Network, Inc.
1974 Sproul Road Suite 302
Broomall, PA 19008
Please be sure to include your loan number on your request.
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