Question:

What happens if I stop paying into my escrow account?

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We have a "required" escrow account. What will happen if we continue to pay our mortgage of $2,100, but stop paying the escrow of $600 that is heaped on topp? We want to pay the taxes and insurance ourselves but are being told we "can't" because we owe more than 80%. Is this a law in California or just something the lender wants us to do? Seems to me that it's another area that someone wants you to just do as you are told and not question it. Does this break the terms of our loan even though we are paying the premiums? Our loan docs seem very vague in this area.

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  1. that is the deal you have with the lender. they require it to make sure that the taxes and insurance get paid on time for their protection. once you get to 80% or better the lender may let you pay directly.

    better to let the lender do it. they will not forget, and you get a monthly instead of annual or 6 months payment.

    if you are worried about not earning interest on the escrow, don't. not enough to quibble over.


  2. When I got my loan, I told them not to escrow the taxes/insurance.  I pay them myself -- have a few hundred withdrawn from my check to go into a savings account.  That way I can make some interest on the money, and not have to pay it a year in advance as most loans have you do.  When the tax bill or insurance is due, I just withdraw what I need and pay it.  I don't know what the law is in your state, but my loan was 50% of home value.

  3. It breaks the terms of the loan.  You are required to pay money into the escrow account because this protects your interest in the property, and it also protects their interest in the property.  Their interest is that the property is acting as security for the loan.  If the taxes or insurance is not paid out of the escrow, the property could be siezed or destroyed without protection.  If you do not pay the escrow, you are risking forclosure.

  4. You'll need to read your loan documents. More than likely you signed several documents that you agreed to pay PITI. Lenders don't usually just slip one form in for you to sign -- in addition to agreeing to pay the escrow amount  there are many disclosures explaining what escrow is and how it is paid out for taxes and insurance.

  5. think you better talk to a professional.....the answer you are going to get here are going to be c**p

    wait three days you will see...

    this is a general question and answer question chat stuff.......

    this **** is too specific...


  6. This question can't be answered without reading your loan documents. It all depends on what you agreed to. Be sure to see a lawyer before you try it.

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