The escrow account is where funds are deposited to cover insurance and property tax obligations. If the loan has an escrow account, the regular mortgage payment includes a portion for these purposes.
The escrow portion of regular mortgage payments (if applicable) are deposited in an escrow account and Popular issues property tax and/or insurance payments, as applicable, based on their respective due dates. Insurance is renewed on an annual basis and property taxes are paid semi-annually.
Popular’s Mortgage Servicing team analyzes the escrow account every year. The purpose of this analysis is to calculate the balances needed to cover property tax and insurance obligations. Also, the analysis determines the amount you must pay every month into the escrow account and identify if there are deficiencies or surpluses in said account.
Once the analysis is completed you will receive, via regular mail, a document known as the
Annual Escrow Account Statement.
You need to be aware that changes in payments are caused by the outcome of the escrow account’s analysis and resulting from premium changes in property insurance policy renewals or adjustments in the property tax Municipal Revenue Collection Center (CRIM, by its acronym in Spanish) billing process.
What is the Annual Escrow Account Statement?
It’s a document we will send you by mail every year after the escrow account analysis. This document provides the following information:
- The new regular mortgage payment and the portion to be deposited into the escrow account over the next 12 months.
- Amount of the previous monthly payment and the portion that was deposited into the escrow account.
- Total amount deposited into the escrow account last year.
- Total amount paid from the escrow account for property tax and insurance premiums last year.
- Escrow account balance.
- Escrow account history (disbursements / accruals / contributions) during the past 12 months.
- A projection of disbursements and contributions over the next 12 months.
- If there is a deficiency or surplus and how they are managed.
What happens if after conducting the annual analysis, the escrow account reflects a surplus or deficiency?
Following the annual analysis, if the escrow account shows a surplus of $49 or less, it will be applied to the next escrow account payments; if it is equal to or greater than $50, it will be returned to you in a check within 30 days after the account analysis.
If the escrow account shows a deficiency, it will be charged in equal amounts over a term of no less than 12 months as established in the Annual Statement; therefore, your regular mortgage payment will increase.
Remember that changes in insurance or property taxes have a direct impact on your monthly payment.
You can download an example of the escrow account analysis sent by Popular at the following