Hi texasgirl,

Have your niece call the servicing company (the 800 number on the monthly mortgage statement) and ask them to send her an itemized explanation of the increase in the impounds.

The good news/bad news;
Her expeirence isn't all that uncommon. Frequently the impounds are estimated (especially when the purchase is a new construction home,) and the servicing company only finds out from the county months later what the actual tax bill is.

Luck!
Dave Donhoff
Strategic Equity & Mortgage Planner

Thanks Dave

But the house is a little over 10 years old.
It's not new.
And she pay the same taxes since nov.06

Also happens when you purchase from the elderly who have special tax excemptions in place. Once the county gets around to noticing that the property has sold & the new owners don't qualify...the taxes revert to normal.

Also happens in a reassessment. Maybe, the mil rate hasn't gone up but the assessed value has? How assessed values are handled varies widely state-to-state, county-by-county, & town-to-town. Sometimes, a sale triggers an increase in the assessed value.

The only way to know what's happening is to call the servicing company.

Tricia

Her actual mortgage payment (principal and interest) didn't go up. It could have been homeowner's insurance or a special tax assessment. Whatever it was refinancing wouldn't make a difference and would cost her more money. It's possible that the $225.55 is a one time thing and not a monthly increase.

The lender would have sent an escrow reanalization to show any escrow shortage. Perhaps she overlooked this. When this is sent, a detailed description of current escrow payments is shown. If there is a negative balance in the escrow account, the mortgagee is given the option to make a single payment for that negative amount or the future payments (next 12 months) will be increased to cover that shortfall and any increases to the taxes & insurance.
Tell your niece to also check the escrow account with her tax bill and insurance renewal.

Our total payment went up as well. It happened just like jgirl said - there was an escrow shortage (the lender sent us an estimate in March and then the actual final bill in April). What we got from the lender showed us exactly what was short (in our case, taxes), the difference and how much the monthly payments would be if we wanted to cover the shortfall that way. We paid the shortfall in one payment to keep our monthly payments pretty much the same.

This is very common in California. The property is reassessed using the new purchase price. Because of Prop 13, the seller (if they lived in the property any length of time) had a much lower assessed value. A buyer can always expect at least one supplemental bill which can be quite substantial if the seller lived in the house for a long time because (because the seller's property taxes were based on a very old property value, not the current value.)

I am in CA and what kylie m commented on is what happened to me.

Moved into a house and got a supplemental tax bill. The mortgage co said it wasn't their responsibility, so I paid it from personal funds. Next year the taxes were on the regular tax bill and... SURPRISE... we had an escrow shortfall. Then our payments went up to not only pay back the shortfall to escrow, but also the compensate for the following year's draw for taxes. The following year the payment dropped a little. The way I see it, it all comes out in the wash...

Q

Yes...It was a escrow shortage. She got all exited for
almost nothing.
It's her first house and she lerned something already.
To read the the whole statetment!!!!!!!

Thank you all

"We paid the shortfall in one payment to keep our monthly payments pretty much the same."

You turned down a free loan????
Money later is always worth less than money now. It's called inflation.

You could have set the money aside for the shortfall and paid it every month.
At least then you would have it in your possession for an emergency.