If a loan requires an “impound required by lender authorization”, who is required to pay the taxes and insurance?

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If a loan requires an “impound required by lender authorization”, who is required to pay the taxes and insurance?

I had a mortgage with one loan company who required impound by lender to pay the real property tax and insurance. The company sold the loan to another bank who then told me that I was required to pay the property tax and insurance. Yet my monthly payment didn’t change and no new mortgage was written by the second bank. Now the second bank has sold the morgtage and I am still paying my own property taxes and insurance no new mortgage was written.

Asked on June 18, 2012 under Real Estate Law, Tennessee

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

If you had a loan where there was an impound accunt for property taxes and insurance on the property you are buying and now you are paying such on your own but the monthly loan amount remains the same, it seems as though you have a large reserve being accumulated with the loan's servicer.

As such, I suggest that you call and write your loan's servicer about why you are paying the property taxes and insurance out of your own pocket and the monthly mortgage amount has been constant.


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