Escrow

As a mortgage servicer, 7 Servicing may collect funds and hold them in an escrow account to pay property taxes and insurance premiums on our members’ behalf. We hope you will find the information below helpful in understanding your escrow statement.

 

Where can I find my escrow statement?

Your escrow statement is available online under Documents > Escrow.

 

How is escrow calculated?

Estimated annual taxes and insurance costs for the year are added together then the total amount is divided into 12 equal monthly payments.

 

Why did I receive an escrow analysis statement?

Every year an escrow analysis is completed and a statement is sent showing the history of escrow payments, balances, and future projections. The analysis determines the amount of the new escrow payment. If property taxes and/or insurance costs go up, a shortage in the escrow account may occur, and the future escrow payment amount may increase.

 

What is a shortage?

A shortage is an amount by which a current escrow account balance falls short of the target balance at the time of escrow analysis.

 

If my payment is increasing, what do I need to do?

The analysis statement will show a New Payment amount and effective date of the payment.

 

 

 

 

If you pay automatically through the mortgage platform online, you do not need to take any action. The payment amount will automatically adjust.

If you pay automatically through another financial institution, you will need to adjust the payment amount in time for the effective date of your new payment.

 

Can I make a lump sum payment of the Shortage Amount?

Yes, you are welcome to make a lump sum payment of the full Shortage Amount shown at the bottom of your analysis statement. If there was an increase to taxes or insurance, there may still be a change in your payment amount.

 

What is an Allowable Low Escrow Balance?

The escrow account has a minimum balance requirement equal to 2 months of the escrow payment.

 

What is a deficiency?

A deficiency is the amount of a negative balance in an escrow account.

 

What is a surplus?

A surplus is an amount by which the current escrow account balance exceeds the target balance at the time of escrow analysis.

 

Does the escrow amount account for PMI ending during the year?

Yes, the termination of PMI is considered in the calculation.