Decline the offer. Don't be so paranoid. If you ignore the letter, maybe they will interpret that as acceptance? Keep a copy of your signed declined in case that dreaded clerical error happens for you dispute it.

That's annoying. If I didn't initiate the request, I don't want any institution that I deal with "offering" something and expecting a response from me. It's not a bad idea to decline and return the letter, but in all honesty - knowing myself the way I do - I'd just trash it. I didn't ask for it, and I bear no responsibility for it.

I say sign and decline, too, because if they don't receive a response from you, one way or the other, they may keep soliciting you, over and over and over.

This recently happened to us with our life insurance company. They did not stop contacting us until they had an answer.

Like Jen, I would trash it. More than likely it's a form letter, possibly sent out to everyone having a mortage with them. Imo, sending a letter back would be even more confusing, and may be misconstrued as acceptance.

Another annoyance: Since we've bought our new house, we've received several pieces of mail that appear to be some sort of "official correspondence" insisting that we must act in some way, but upon closer examination they are actually carefully crafted sales pitches from third party vendors. That sort of marketing just reeks, and should be illegal.

I disagree about declining always being the best way to stop solicitation. Once upon a time that might have been true, but in these days of computerized mail systems & shared consumer data, no more, IMPE. Ignoring can sometimes be the best choice these days, I believe. Responding seems to open the floodgates for more "offers", again IMPE.

That said, I would also read it very carefully for any language stating no reply means acceptance...

Just take a black sharpie and write NO across the letter and send it back :-)

We once got involved with having the bank pay the insurance and it was a nightmare. I would avoid it at all costs. I finally got rid of it.

However, I would call the bank and inquire about what needs to be done to decline. Normally, requiring a mortgage escrow account is for the bank's benefit and done with less than stellar creditors and/or if the mortgage is higher than 80% of the purchase price.

Who knows what prompted them to ask you about the Escrow account now, it doesn't really matter because when you originated your loan, you signed two documents, one that declined wanting an escrow account and another where you promised to keep a policy active without any lapse in coverage. Once you decline an escrow account, the bank can't arbitrarily set one up for you. Even if you default on the loan some how or they get notice that the insurance wasn't paid, they would put their own insurance on the property and make you financially responsible until you once again provide proof of insurance. It's very expensive too. So if you feel more comfortable not doing anything, don't, you're really not obligated to.

Just to be sure everything is ok, I would contact your insurance provider and confirm that the policy shows that it's in force, that the mortgage company is listed as the loss payee and that they've been provided a copy of the most recent dec sheet.