Can my monthly mortgage payment amount change because of an escrow account shortage?

UPDATED: Sep 28, 2010

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Can my monthly mortgage payment amount change because of an escrow account shortage?

Recently I refinanced my mortgage. My monthly payments were to be $2042 – including all my taxes. After a few months I received a letter that my new monthly payments will be $2285 because there is a shortage in my escrow account.

Asked on September 28, 2010 under Real Estate Law, New York


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

The answer is to read your mortgage documents. But unfortunatley I can virtually guarantee that they contain language allowing for just this very thing.  Errors in calculations for taxes, insurance, etc. can, and do, happen.  A lender must protect themselves against this.  That having been said, ask for an accounting of your escrow account.  Possibly the error was done in a follow-up calculation and the original amount was correct. Best of luck.

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