In addition, within 30 days after completing its annual review of an impound account
, the mortgage company must notify the borrower of the amount by which the contributions exceed the amount reasonably necessary to pay the annual obligations due from the account.
Sometimes known as impound accounts
, escrow accounts are set up by your lender to pay certain property-related expenses: real estate taxes, homeowner's insurance, mortgage insurance and sometimes your community association fees.
Potentially fraudulent activities include poorly prepared impound accounts
, manipulated paperwork, and interest rates that were raised without the proper notification.
In the area of mortgage servicing, the bill requires certain borrowers to have escrow or impound accounts
established in conjunction with their mortgages to provide protection against tax liens, the forced placement of insurance, and unanticipated taxes and insurance premiums.
Also, while not required in many jurisdictions, some lenders pay interest on impound accounts
. If this is not offered, seek interest to be paid, particularly since most impound accounts
usually demand a t hree-month surplus of funds.