Once upon a time when a letter arrived from your lender you probably believed that what they said was accurate. However today before you agree to whatever your lender has sent you do a little double checking.
Our household recently received notification that our payments would increase due to a “shortage” in our escrow account. The lender was proposing, a not insignificant increase in our escrow account and our payments to cover real estate taxes. Now most of us living in Northern Virginia know that our real estate assessments have dropped and in my area they have dropped a huge amount. Looking over the lenders figures immediately made me mumble, “Not so fast buddy.”
With my 2008 and 2009 tax assessment in hand a call was made to the lender. After a few transfers and even a few more minutes on hold I was able to reach someone in the tax department. It seems that they just “assumed” that our tax value would be the same in the subsequent year and collect based on that amount.
Oh really? Now there probably isn’t anyone in Northern Virginia that isn’t counting on an increase in our real estate tax rate in the near future. However to make the numbers that our lender suggested work our tax rate hike will need to be over 4x the current tax rate. And despite record budget shortfalls there isn’t anyway that in one year the tax rate will climb by that amount.
So our escrow account is being “re-analyzed” and we should hear back in the next 7 to 10 days after they have confirmed the values with the local county tax offices. So before you throw the letter from your lender in the file take time to read it carefully. If your intuition tells you that it doesn’t add up, make a call to customer service or send a letter asking for additional information.
Lenders have proven that they aren’t infallible when it comes to mistakes. They shouldn’t get more of our money to mismanage than the already have.