Understanding Your Escrow Account
Escrow accounts are used to make payments on your behalf for real estate taxes and premiums for insurance required to protect the property, such as homeowners insurance. To make those payments, we collect escrow funds as part of your monthly mortgage payment. This ensures that your bills are paid in full and on time.
FAQs about Escrow Basics
Where can I find more information about my escrow account?
For additional escrow account information, you can:
Can I delete my escrow account and pay my own taxes and insurance?
- Access your mortgage account online through Customer CareNet (CCN)
- Check your annual escrow account disclosure statement mailed to you in January (this statement is not currently available online)
ServiSolutions does not allow the deletion of the escrow account.
Does ServiSolutions pay interest on escrow?
No. ServiSolutions does not pay interest on escrow in accordance with applicable state and federal laws.
How is my monthly escrow amount determined?
To determine your escrow payments, we:
- Estimate the amount we’ll have to pay over the next 12 months for your real estate tax and homeowners insurance bills. We base this estimate on information from your loan closing documents, your taxing authority and insurance company, or your previous tax and insurance bills.
- Divide the estimated amount by 12 and add the result to your monthly payment.
- Determine whether any adjustments, such as shortage payments, are necessary to keep your escrow account in balance.
Will my monthly escrow amount ever change?
It may. We conduct an escrow analysis annually to make sure we’re collecting the right amount to cover your projected taxes and insurance premiums. If these payments increase or decrease, we’ll recalculate your escrow payment. This is separate from the calculation to determine whether you have a shortage or overage, so your payment amount could increase even if you pay your shortage in full.
An escrow analysis is a periodic audit of escrow receipts to see whether your monthly payment is adequate to pay for taxes and insurance. Increases or decreases in your annual tax or insurance bills may cause your monthly mortgage amount to change. If bills paid from your escrow account before the escrow analysis were higher than expected, your account may have a shortage. If they were lower than expected, your account may have an overage. After each escrow analysis, we’ll send you an escrow account disclosure statement by mail.
ServiSolutions analyzes all escrow accounts annually.
FAQs about Escrow Analysis
Why has my homeowner insurance premium changed?
You will have to contact your insurance agent to discuss your policy and/or premium changes.
Why has my property tax increased?
You will need to contact your local property tax assessor’s office to discuss your property taxes. Please be sure the tax assessor has your correct homestead and/or exemption status on file.
How can I pay my escrow shortage?
You can pay an escrow account shortage in one of two ways:
- You can mail a check to our office to repay the escrow shortage. Please indicate “escrow shortage” on the check for proper application.
- Pay the amount over 12 months, with 1/12 added to each monthly mortgage payment. We’ll do this automatically if you don’t pay the shortage in full.
If the shortage is less than $1, you won’t need to pay it at that time. Note that even if you pay your shortage in full, your escrow payments could still increase.
What happens if I have an overage?
If your account is current, we’ll send you a refund check if the overage amount is $50 or more (you’ll see this transaction listed as an Escrow Refund on your account). If the overage is less than $50, we’ll apply that amount to your payment.
Why does my account require a minimum balance and how do you determine the amount?
A minimum balance helps ensure that if taxes or insurance premiums increase, your account can cover them without ending up with a large shortage. Minimum balance requirements are governed by federal law, or by your loan contract and applicable state law. The minimum balance is equal to two months of escrow payments (not including mortgage insurance), unless state law or your loan contract requires a lesser amount.
Can I request an escrow analysis at any time?
Yes, you may contact Customer Service to request an escrow analysis except when accounts are within 60 days of the annual analysis period.
What is a midterm policy change?
This is when you make changes that may affect your insurance premium outside your renewal period. If changes are made midterm you will be responsible for requesting a refund for any used premiums from your previous provider and making payment in full to your new provider. Your new provider may forward ServiSolutions proof of payment along with the evidence of insurance or declarations page to the attention of the Insurance department. You will be subject to a $7.50 midterm policy change fee. If you wish to have your monthly payment adjusted due to the change please send a written request for an escrow analysis to be completed.
What do I do with my property city/county tax bill notice I received?
You may retain the copy you received for your records. ServiSolutions will receive a copy of your tax notice from our third party vendor to pay the taxes on your behalf.
My county offers a discount for early payment of taxes. Will ServiSolutions pay my taxes by the early discount date?
ServiSolutions will pay the taxes in accordance with the early discount date. You may fax the tax bill to our Tax Department at 334-271-3104.
What is the purpose of mortgage insurance?
Mortgage insurance premium is a guarantee that if the borrower defaults, a lender who forecloses on the house will not suffer a loss on the loan. Mortgage insurance is referred to as MIP (mortgage insurance premium) on FHA loans or PMI (private mortgage insurance) on conventional loans.
How do I have my PMI/MIP deleted?
Not all loans have provisions for cancelling PMI/MIP. You may send a written request to have your PMI/MIP requirements reviewed to determine if you are allowed to have your PMI/MIP removed. The PMI Department will review your requirements and will respond to you in writing. You may forward these requests to the address or fax number below:
Attention: PMI department
P.O. Box 242967
Montgomery, AL 36124-2967
What is ServiSolutions’ Mortgagee Clause?
ServiSolutions, a division of Alabama Housing Finance Authority
P.O. Box 242967
Montgomery, AL 36124-2967