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Important Information About Mortgage Escrow Accounts

As part of your monthly payment to Nationwide Advantage Mortgage®, you may be required to make a payment to a mortgage escrow account. Escrow accounts allow Nationwide Advantage Mortgage to pay the taxes and insurance on your property. Mortgage escrow accounts allow borrowers to budget by spreading the annual cost for taxes and insurance throughout the year.

About the Real Estate Settlement Procedures Act

The escrow analysis provisions of the Real Estate Settlement Procedures Act (RESPA) are designed to ensure all lenders are handling borrowers’ escrow accounts in the proper manner. Among other things, RESPA:

  • Provides for the establishment of mortgage escrow accounts to collect 1/12 of the annual escrow disbursements, on a monthly basis, for the payment of taxes and insurance.
  • Allows lenders to maintain a cushion equal to 1/6 of the estimated total annual payments. (A cushion is an amount of money held in the escrow account to prevent the account from being overdrawn when increases in disbursements occur.)
  • Requires lenders to provide borrowers with an Initial Escrow Account Disclosure Statement within 45 days of closing, and an Annual Escrow Account Disclosure Statement at least once every 12 months thereafter. These statements are designed to provide information regarding the anticipated tax and insurance activity in the escrow account.
  • Allows lenders to close loans using the aggregate (low-point) method. The aggregate method of mortgage escrow analysis simply means the escrow account, based on projected taxes and insurance for the next 12-month period, should at its lowest balance not exceed two times the monthly escrow payment.

To provide excellent service to our borrowers, we review escrow information on all new loans to ensure consistency in handling. Borrowers may receive an additional Escrow Disclosure Statement from us shortly after closing if escrow payment adjustments are made. After that, we will analyze escrow accounts annually based on the state where the property is located, prepare an Annual Escrow Account Disclosure Statement and adjust escrow payments in compliance with RESPA requirements.

We appreciate the opportunity to do business with you. If you have any questions, please contact us at custserv@nationwide.com, or by phone at 1-800-356-3442.

View our Mortgage Escrow Analysis Schedule to see when we will be analyzing your state.

 



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