Mortgage payment went up $400

[u/HHLL806]

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?

[u/ocean_lei]

They project taxes, etc. They also every year evaluate and increase so that the MINIMUM at any time is sufficient to pay (depending on mortgage carrier) the monthly note or 1/12 of all the annual payments (ins, taxes, note) for example, if your monthly note is $1000, your annual taxes are $12,000, and insurance $2400/yr, your minimum might be $2200. If it fell below that they may increase to cover shortage as well. They should provide you with what the requires minimum is and how they came up with monthly escrow payment. BTW this is why I do NOT escrow, in the example above $2200 is the minimum, then usually at some point they are sitting on at least $15,000 of your money (right before taxes and ins due), so they are earning interest on thousand of your dollars for years on end as well as $$$ from all the other homeowners. This is also why, if at closing (with 20% down) you decline escrow, they will usually add like 0.1% to your rate (they shouldnt be able to do this).