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Home Loans

Annual Escrow Account Disclosure Statement

Your Annual Escrow Account Disclosure Statement provides you with details about your escrow account and the changes to your monthly escrow payment. When you receive your statement, be sure to review it for accuracy.

Understanding Your Statement

If you have any questions or if there are any discrepancies with the statement, please contact the A+FCU Mortgage Servicing team at 800.252.8148, ext. 2884, as soon as possible to allow time for any adjustments prior to your first payment due date.

Understanding Your Annual Escrow Account Disclosure Statement Guide

(1) Options To Restore Your Required Account Balance

These are the two options available regarding the mortgage payment.

Option 1: Gives the option to cover any shortage/deficiency, if applicable. If option one is chosen, please make sure to include the coupon on the back of the Escrow Account Disclosure Statement. Your shortage/deficiency payment will be deposited to your escrow account and the calculated monthly payment will be adjusted accordingly.

Option 2: Does not require any action. You will pay the new total monthly payment listed on your Escrow Statement.

 

(2) Projections For The Next 12 Months

Federal law requires that we analyze your account each year to determine whether the current balance and the amount of money we collect each month is appropriate based on the bills that we expect to pay over the next 12 months.

This section contains a projection of escrow activity for the coming year. Projections include monthly payments into the escrow account and escrow disbursements out of the account based on last year’s activity. Please note that if Property Taxes or Insurance Premiums increase during the year, your escrow balance may reflect a shortage the following year.

 

(3) New Total Monthly Payment

If applicable, this section reflects your new total monthly mortgage payment.

The effective date represents the starting due date of the new total monthly payment.

The statement date reflects the date we ran the analysis prior to the due date for your projected mortgage payment for the next 12 months.

Notice: Please contact us if you know of any bills that should be added to or removed from this section, or if the amounts and/or due dates are incorrect.

 

(4) New Monthly Escrow Payment Breakdown

This section contains a complete breakdown of your New Monthly Escrow Payment.

The low point equals the lowest monthly escrow balance during the 12-month projection. An escrow balance is projected for a 12-month period, assuming that A+FCU receives scheduled payments and makes scheduled disbursements (pay property taxes, insurance premiums, etc.).

The starting balance needed to ensure the account has enough funds to cover all property taxes, insurance premiums, etc.

  • surplus is the portion of the projected escrow balance that is greater than the cushion amount.
  • shortage is the amount by which the escrow balance falls short of the cushion amount.
  • deficiency is the amount by which the balance goes below zero. When the account has a deficiency, it will also have a shortage.

A surplus in the amount of $50 or more is refunded in the form of a check sent via mail, while surplus amounts under $50 are returned by lowering the monthly escrow payment due.

Example: $48 surplus divided by 12 months = $4 decrease to the monthly escrow portion

Number of months the surplus, shortage, or deficiency will be divided by. Shortages and deficiencies are divided by 12 months and added to the monthly payment.

Example: $1,200 shortage divided by 12 months = $100 added to the monthly escrow portion

Please refer to the above dropdown to go over surplus amounts.

Monthly payment amount reduced or added to the monthly escrow based on the surplus, shortage, or deficiency divided over 12 months.

Example: $1,200 shortage divided by 12 months = $100 added to the monthly escrow portion

Total estimated amount of any tax, insurance, and any other escrowed items anticipated to be dispersed from the escrow account.

Number of months the escrow disbursement(s) will be divided by. Disbursements are divided by 12 months and added to the monthly payment.

Example: $5,100 for tax, insurance, etc. divided by 12 months = $425 per month

Monthly payment amount of the total estimated escrow disbursements.

Example: $5,100 for tax, insurance, etc. divided by 12 months = $425 per month

(5) New Monthly Payment Summary

Current Payment Amount. This is the principal and interest portion of your mortgage payment. This amount does not change throughout the life of the loan unless your loan is an Adjustable Rate Mortgage.

Estimated Escrow Payment Amount. The new total escrow portion of your monthly mortgage payment. This amount includes any taxes, insurance, and/or other payments needed.

Total New Payment Amount. The new monthly payment which is composed of principal and interest, the escrow collection for taxes and insurance and any additional collection(s) that may be required to cover a shortage/deficiency in the escrow account.

Reminders:

 

(6) Escrow Payment Coupon

Use this coupon to make the shortage/deficiency payment. This is the coupon for Option 1 on page 1.

 

(7) Escrow Account History For The Prior Period

This section shows monthly transaction details of payments to and disbursements from your escrow account since the last escrow analysis calculation date.

 

(8) Previous Monthly Mortgage Payment

This section shows the total monthly mortgage payment from the last computation period. There is also a breakdown of the total monthly payment to show what amount went to principal and interest and the amount applied to escrow.

Note: If your mortgage recently transferred to us from another servicer, the projected deposits and payments from your previous statement may not be available.

Frequently Asked Questions

Every time you make a mortgage payment a set amount of your payment (escrow portion) is deposited into your Escrow Account. We maintain this account on your behalf to ensure timely payment of your real estate taxes and homeowners insurance. Any applicable flood insurance and/or mortgage insurance premiums are also paid from this account. In addition to funds to cover these escrow bills, your Escrow Account also holds funds to cover your “required Escrow Account minimum balance.”

At least once a year, we review your Escrow Account to determine if the escrow portion of your monthly payment is sufficient to cover the annual requirements of your Escrow Account. 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 its effect on your monthly mortgage payment. Occasionally, we may provide you with an interim statement, if needed.

Federal law allows us to maintain up to a two month minimum balance or cushion of funds in your Escrow Account. It serves as a safeguard in the event of an increase in your escrow bills. No more than one sixth of your total projected payments (or two months of escrows) for taxes and insurance constitute this cushion unless your mortgage contract or state law specifies a lower amount.

Here are some potential explanations for increases and decreases to the escrow portion of your monthly payment.

Hazard Insurance: Insurance premium can change due to changes to your coverage or your rate. Please contact your insurance company or your local insurance agent with questions about changes to your premium.

Real Estate Taxes: Real Estate Taxes can change as a result of your property reassessment, a change in your tax rate, or a special assessment. Please contact your local tax office for any questions regarding changes to your real estate taxes.

New Construction: Typically, the first tax bill for a new construction only covers the lot/land. A subsequent bill is generally higher and is based on the fully assessed value which includes the land and the house.

Initial Escrow Deposit: Prior to closing, the escrow portion of the monthly mortgage payment is calculated based on the information available. Available information is usually an insurance quote or premium amount for existing coverage, and tax bill information from the previous year. This amount may turn out to be more or less than the actual bills, resulting in a change to your monthly mortgage payment.

This results in a surplus. In case of a surplus, you typically receive a refund check if the surplus amount is $50 or more and the escrow portion of your monthly mortgage payment is adjusted according to your new escrow bills. Details of these changes are sent to you in your Escrow Account Disclosure Statement. Your loan must be current when the escrow analysis is performed to receive a credit or refund of any surplus funds.

This results in a shortage. We spread your shortage over the next 12 months in addition to adjusting the escrow portion of your monthly payment amount, or you can choose to pay the shortage in full by the date listed in the Escrow Analysis Disclosure Statement. Please include the coupon from the statement when sending in the check.

Yes, it can. Even if you pay the shortage resulting from last year’s escrow payments, an increase in your projected tax bill or hazard premiums for the coming year could result in your payment increasing.

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