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  How to Read Your
Annual Escrow Account Disclosure Statement
 
 
What is an Annual Escrow Account Disclosure Statement?
The escrow account on your loan was established to pay certain bills associated with your property. These may include your real estate property taxes, homeowners insurance , flood insurance (if required), federal or private mortgage insurance (MIP or PMI), etc. The Annual Escrow Account Disclosure Statement is a review and recalculation of the escrow account based on actual amounts paid into the escrow account and actual amounts disbursed from the escrow account. The actual bill amounts disbursed from the escrow account are totaled and divided by 12 to determine the minimum required monthly escrow payment for the coming 12 months. Based on this anticipated billing activity, the amount needed to pay these future bills determines whether your escrow account has a shortage or a surplus, and how this affects your total monthly mortgage payment.
 
Loan Summary: This section displays current loan balances and next payment due dates at the time the statement was prepared. The principal balance in this section is not a payoff amount. The statement date and property address are also listed in this section.
 
Prior Payment and New Payment Breakdown: This section includes the total monthly payment from the last analysis and the new total monthly payment from the current escrow analysis.
 
Comparing Prior Projections to the Actual Payments: This section compares the escrow account activity that was projected at the time of your last escrow analysis with the actual escrow account activity. There are two major columns in this section:
 
  • The Prior Year Projection* column reflects the information from your last escrow analysis: the amounts expected to be paid into the escrow account and the bill amounts expected to be disbursed from your last analysis.

  • The Actual Activity column displays the actual payments made into the escrow account and the actual bill amount disbursed from the escrow account during that same time period.

  • The bills to be disbursed were projections - as a result, the actual amounts paid may be different between the projected amounts and the actual amounts will affect the total escrow account shortage or surplus.
*If Chase did not originate your mortgage loan or if your loan was recently transferred to Chase by another mortgage servicer, your prior projection information may not be available.
 
Lump Sum Escrow Shortage Payment Coupon:  If your escrow account has an escrow shortage, this coupon may be used to pay the shortage in full. If you chose not to pay the escrow shortage in full, the shortage amount will be divided by 12 and added to your monthly payment amount to be collected with the next 12 monthly mortgage payments.
 
General Escrow Information: This section lists the items that are to be paid from the escrow account, the next due date of the billing cycle, the new year projection (or amount that we expect to pay in the coming 12 months), and the monthly required escrow (usually 1/12 of the annual bill amount). If a bill is not listed in this section, it may not be paid.

If you are aware of a bill that should or should not be placed in this section, please contact our Customer Care professionals. Click here for contact information.
 
Projections For Coming Year: This section is the estimate of activity projected for your escrow account for the coming year.
 
Computation of Your Escrow Account: This section shows the calculation of your escrow account shortage or surplus. Two factors are used in this calculation: the Anticipated Escrow Balance and the Target Escrow Balance.

The Anticipated Escrow Balance is calculated by taking the escrow balance at the time of the Escrow Analysis, adding in all payments up to the effective date of the analysis and subtracting all scheduled disbursements up to the effective date of the analysis.

The Target Escrow Balance is the amount of money required in your escrow account on the effective date of the analysis in order to bring your escrow account balance to its lowest point over the coming 12 months. The lowest point is zero plus the allowed reserve as guided by the Real Estate Settlement and Procedures Act (RESPA).

The Anticipated Escrow Balance is subtracted from the Target Escrow Balance to determine your escrow shortage or surplus.
 
 
 
 
 
 
 
If your monthly mortgage payment is increasing, please read this important information:
 
Increases in your monthly mortgage payment as a result of an escrow analysis are most commonly due to increases in property taxes and or homeowners insurance.
 
  • If you have questions about an increase in your property taxes, please contact your local taxing authority; they are the best source for information to explain any changes in your tax bill.
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  • If you have questions about an increase in your homeowner's insurance premiums, please contact your insurance company or their local agent; they are the best source for information to explain any changes in your annual premium amount.
 
 
If your monthly mortgage payment is decreasing, please read this important information:
 
An Escrow Analysis may result in a surplus for many reasons. Under certain conditions, you may wish to return the surplus to your escrow account. The most common reasons are:
 
Initial escrow deposit collected at closing, if your loan closed within the last 18 months. Frequently, lenders must estimate the amounts for escrow because the actual amounts are not readily available at the time of closing. If the actual bills paid from your escrow account are lower than estimated at closing or the initial escrow deposit collected is more than the amount needed, a surplus may result.
 
Land value/partially assessed real estate tax amounts for newly constructed homes. A surplus may result if the initial escrow deposit collected at closing is based on an estimate of the fully assessed property value and the actual tax payment for the first year is based on land value only.

Decrease in escrow bill amount. If the amount of your real estate taxes or insurance decreased since the date of your last escrow analysis, a surplus may result.
 
 
 

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