Understanding My Escrow Account
What is escrow analysis, and how often is it performed?
Carrington Mortgage Services, LLC (CMS) completes an escrow analysis each year to ensure your escrow account is funded correctly. During the analysis we will determine any surplus or shortage, and adjust your monthly payment accordingly to cover all of the bills that are paid through your escrow account.
The analysis outlines the activity on your escrow account for the past year and the anticipated activity for the upcoming year. We use the tax and insurance amounts from the most recent year to project taxes and insurance for the upcoming year.
How am I notified when my escrow account is reanalyzed?
You will receive an updated escrow statement. To view a copy of your escrow statement on our website:
- Log into your online account
- Click “Billing and Tax Documents” on the left menu
If you have opted into paperless statements, you will receive a notification when the document is available online.
What is an escrow cushion?
An escrow cushion helps to avoid a negative balance in the event of changing tax and insurance amounts.
The allowable cushion is equal to two monthly escrow deposits unless otherwise required by state law or your loan agreement. If your escrow balance falls below the minimum required balance (cushion), you are considered to have a shortage in your escrow account.
If you have a shortage, the portion of your monthly payment that is allocated towards your escrow account will likely increase in order to maintain the appropriate balance in your account.
Where can I find information about my escrow account?
For more information on your escrow account, including your current balance, current payment, and recent disbursements:
- Log into your online account
- Click “Escrow Information” on the left menu
How do I add or cancel an escrow account?
If you have an FHA, USDA or VA loan, you are required to have an escrow account. The escrow account is designed to be a benefit to you by reducing the burden of large annual payments due for insurance and taxes.
If you have a conventional loan, you elected to setup an escrow account in your loan agreement when you originated your loan.
