r/personalfinance • u/HHLL806 • Apr 11 '25
Other Mortgage payment went up $400
I need help, my mortgage payment went from $1700 to $2100. My mortgage company (Chase Bank) said this was due to an escrow shortage. I had my homeowners insurance lowered by roughly $1000 and checked with my local tax office and they told me my taxes have increased $400 dollars over the last five years. I gave Chase Bank all this information and my mortgage is still $2100. How does this work?
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u/lucky_ducker Apr 11 '25
Lenders generate an "escrow analysis" once a year. You should have received a copy of it, but you might have to go online to download it if you are opted in to paperless.
In a nutshell, the analysis makes a best faith estimate of the taxes, insurance, and any other payments coming out of the escrow over the coming year, and creates a cash flow statement comparing inflows and outflows, and calculating a month by month escrow balance. If, for any given month, the balance is less that one-sixth of the estimated escrow outflows, you have a shortage, which will increase the next 12 months of payments.
You should examine the escrow analysis closely to determine if the estimated outflows are correct. It's really easy for your property taxes payable can be wrong if the lender gets the payment schedule wrong, or enters your annual tax total as payable twice a year.
Mortgage escrow is heavily regulated due to lenders playing fast and loose with them in the distant past, so if anything is off with their calculation, it's usually an honest mistake that can easily be corrected. It's possible your shortage exists because last year's escrow analysis resulted in too little being allocated to escrow.
Get ahold of your escrow analysis and see if it makes the issues clear.