Understanding your escrow account

An escrow account acts like a savings account for your taxes and/or insurance. As each mortgage payment is made, a dedicated portion of the funds are deposited into the escrow account to pay your taxes and/or insurance. Projected tax and/or insurance amounts are equal to last year’s actual tax and/or insurance payments. In other words, we estimate that your tax and/or insurance bills for the upcoming year will be the same as they were the prior year. TruMark Financial will use funds from your escrow account to pay your tax and/or insurance bills when we receive the bills from the city, township, county, school district or insurance company.

At least once a year, TruMark Financial reviews your escrow account to determine if the escrow portion of your monthly mortgage payment is sufficient to cover the annual requirements for your real estate taxes and any applicable insurance. We are required under the Real Estate Settlement Procedures Act (RESPA) to disclose to you in an Escrow Account Disclosure Statement the results of this review and how it affects your monthly mortgage payment.

Your required starting balance is determined by calculating what your balance needs to be today to prevent the escrow balance from falling below the minimum required balance over the next 12 months. This is purely a mathematical calculation.

Increases and decreases to the escrow portion of your monthly mortgage payment are typically the result of changes in your real estate taxes and/or insurance. Some possible reasons are:

• Homeowner’s Insurance: Your premium may be different as a result of changes to the type or extent of your insurance coverage, or if your insurance company changed your insurance rate. We encourage you to contact your insurance company or local insurance agent for any questions regarding changes to your homeowner’s insurance premiums.
• Real Estate Taxes: Your real estate taxes may be different as a result of your property being reassessed or if the tax rate has changed. Unexpected tax bills for special assessments charged by your local tax authority will also impact the amount we collect for your real estate taxes. Anticipated tax payment time frames may change per local authority as well. We encourage you to contact your local taxing authority for any questions regarding changes to your real estate taxes.
• New Construction: A difference may occur with partially assessed real estate tax bills for new construction. Typically, the first tax bill for new property is only for the lot/land. We may have received a bill for the fully assessed value which includes the land and the house.
• Initial Escrow Deposit: Escrow is sometimes estimated at loan closing because information may not be available at that time. If the amount collected for the setup of your escrow account was more or less than the actual bills received for real estate taxes and/or insurance premiums, this will cause your monthly mortgage payment to change.

To keep your payments the same, you must make an escrow deposit equal to the new monthly escrow payment minus your old monthly escrow payment times 12. In other words, you must pay the difference in a lump sum which would be paid over the next 12 months.

The old and new monthly payments are shown on the first page of your escrow analysis statement:

In this example, the “new” monthly escrow payment of $338.72 minus the “old” monthly escrow payment of $260.83 times 12 = $934.68. This would be the lump sum escrow deposit required to keep your payments the same.

You can make this escrow deposit online, at your local TruMark Financial branch, or by contacting us at 1-877-878-6275. Please email us at mortgageservices@trumark.org if making this payment online so we can update your record.

Automatic mortgage payments are made in a variety of different ways. If your automatic payment is set up any of the following ways, you must update the new amount yourself after escrow analysis.

• Recurring transfer through online banking – log in to TruMark Financial’s online banking, go to Transfers & Payments > I want to View Scheduled Transfers > click Edit on your mortgage payment transfer and update the amount.
• Biweekly payments through EarnUp – log in to your EarnUp Account or call 1-888-418-9119 and request to update the minimum monthly payment.
• Recurring bill payer from another institution – contact your other institution and update the payment amount.
• If you are a current user of Online Loan Payment Service, click here to log in and update the payment amount.

There are various requirements that must be met in order to close your escrow account. If you would like your account to be reviewed to determine if it meets the requirements to close escrow, please email us at mortgageservices@trumark.org.

Taxes: Contact your local assessor’s office.

Insurance Premiums: Contact your insurance agency.

Escrow or Account Information: Contact our Member Service Center at l-877-878-6275