Since your servicer pays property taxes and insurance on your behalf, your escrow account needs a minimum balance (also known as a cushion) to cover those bills. An annual escrow analysis determines whether your monthly payment needs to increase, decrease or stay the same to maintain that minimum balance. The factors used to determine this are simple: We look at payments that have already been made on your behalf, estimate future disbursement amounts over the coming year and look at the balance in your account at the time of analysis.
Requesting A New Analysis
A new analysis is most often needed for two reasons: A tax reassessment or a change in your insurance carrier. If either or both of these occurred and weren't factored in, you may be entitled to a new analysis.
If you feel there's an error with your most recent escrow analysis or that an interim analysis may be necessary due to recent changes with your taxes and insurance, please contact us. Though you can also use regular mail, the message center is the easiest, quickest way to get the process rolling.
Please include any documentation you feel is necessary to help support the need for a new analysis, such as an insurance bill or declaration page, and/or a tax bill from your taxing authority.
If you decide to send the request via regular mail you should include the following:
- Your UWM loan number
- The property address
- The name on the loan
- The last four digits of the social security number for the borrower on the loan
Generally, an escrow analysis occurs once a year. We perform your analysis at the same time each year depending on which state your property is in.
If your taxes or your insurance payments have increased or are projected to increase, your escrow payment will also increase as a result of the analysis. If you're found to have a shortage and need to make a payment to maintain your minimum escrow balance, you will likely have the option to spread payment out over a twelve-month period, and you may be eligible to spread it over an even longer timeframe. Please contact us if you have a substantial shortage and we will work with you to come up with a manageable payment plan.
Surplus & Shortage
Sometimes, due to unanticipated changes in your tax rates or insurance premiums, the amount we need to pay on your behalf is higher or lower than the balance in your escrow account. An escrow shortage occurs when there is not enough money in your account to cover the expected tax and insurance payments while maintaining the required minimum balance, also known as the cushion requirement. In this case we will advance the full tax and insurance payments as scheduled and inform you of the shortage amount due.
For example, if your escrow analysis determines that your minimum required balance for the next year is $400.00, and also that your account's lowest projected balance during the next year will be $250.00, you will have a shortage of $150.00.
An escrow surplus is when the amount we need to pay on your behalf is less than the amount in your account above your cushion requirement.
So if your analysis determines that your minimum required balance for the next year is $400.00, and also that your account's lowest projected balance will be $600.00, you will have a surplus of $200.00.
How do I pay off a shortage?
Shortages can be paid off in one lump sum payment within 60 days of you being notified. Depending on the size of your shortage, you may be able to spread payment out over a longer time period, typically twelve months. A shortage has no impact on your credit rating.
What happens if I have a surplus?
If the surplus is under $50, it will remain in your escrow account and be used in your upcoming escrow distributions. If it's $50 or more, and your account is current, you'll receive a check from us for the full amount of your surplus.