California Ethical Real Estate Funding, LLC (CEREF) - Hope for Homeowners

What is an escrow account?

An escrow account (also known as an impound account) is an account established to help borrowers pay property taxes and insurance premiums for your mortgaged property.  Deposits are made to the escrow account through monthly payments made in addition to the principal and interest amounts due.  Note that payments of supplemental tax bills may not be paid from your escrow account.

You should not confuse this type of escrow account with the escrow account for loan closing that may have been established by you and the Seller when you purchased your home.

What is the current escrow balance?

This is the amount of money in your escrow account available to pay taxes, mortgage insurance, and homeowner’s insurance for your property.  The escrow balance can be found on your monthly billing statement.

What part of my payment is being applied to my escrow account?

The amount of money applied to your escrow account is determined by the amount needed to pay your taxes and or insurance on a yearly basis.  This amount will change when the amount needed to pay these items either increases or decreases, or the scheduled payment for the last year has not been met.  You can find the amount of your escrow payment on your monthly billing statement.

Why should I set up an escrow account to pay my taxes and insurance?

With an escrow account, you do not have to worry about paying a large tax or insurance bill in one lump sum when they come due.  You do not have to worry about budgeting for these items.

How can I keep track of payments made to my escrow account?

In the activity section of your billing statement you will see what was paid, how much and when it was paid. Payments made will only be reflected on the billing statement sent the month following the payment.  Also you will receive a detailed annual escrow analysis that will show, moneys collected, disbursements made, and anticipated disbursements for the coming year.

What if you have to pay my taxes or insurance premium and there are not enough funds in my escrow account to pay the full amount?

Your loan Servicer will pay the full amount due for your taxes and/or insurance premiums even if you are short in your escrow account, and then will simply collect the shortage back from you in, additional monthly amounts over the next twenty four months.

Is an initial deposit required to establish an escrow account?

There is no fee required to establish an escrow account, however a deposit to create an initial balance in your escrow account may be required.  This deposit is generally equal to two months escrow payment, subject to state limitations. During the first twelve months your escrow account is active, your Servicer will collect this deposit in twelve equal payments.  This amount is in addition to that which is collected to pay the regular installments of taxes and/or insurance premiums that will be paid from your escrow account.

Do I need to do anything with the Annual Escrow Analysis Statement?

Your escrow analysis statement will show you what is projected to be paid out of your escrow account over the next twelve months to ensure that your property taxes and related insurance premiums are kept current.  You should review this statement to make sure that your lender is scheduled to pay your taxes and/or insurance premiums at the correct time and for the correct amount.  Discrepancies should be immediately reported to your lender.

How often will I get an Escrow Account Disclosure Statement?

Your lender will analyze your escrow account at least once every twelve months to ensure there are sufficient funds being collected to make all scheduled payments.  The analysis determines if any adjustments need to be made to your escrow payments based on projected disbursements for the coming year. Each time you receive an analysis statement you should review it for accuracy and contact us if you have any questions regarding your tax and/or insurance premium disbursements.

What if I want to change insurance carriers?

You are free to change insurance carriers any time you wish.  Having an escrow account does not mean you cannot make changes to your insurance.  Please ensure your new insurance company is aware that your insurance is escrowed and provide them with the following mailing address so we can ensure your monthly premium is paid on time.

What if my monthly mortgage payment is automatically deducted from my checking or savings account?

Once your lender establishes your new payment, it will automatically deduct from your bank account at the new payment amount. It is your responsibility to ensure that there are sufficient funds in your account on your scheduled payment deduction date.

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