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Old 09-29-2009, 05:34 AM
 
354 posts, read 2,432,137 times
Reputation: 255

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Quote:
Originally Posted by TheStupid View Post
I did not see that on the Bad Faith Estimate.
Yea ours wasn't on our "Bad Faith Estimate" (good one) either. Our lender is Citi and we were told that this is a lender requirement that is being implemented because a lot of people close, get their tax bill and don't have the funds to pay it.
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Old 09-29-2009, 06:57 AM
 
Location: San Antonio-Westover Hills
6,884 posts, read 20,429,615 times
Reputation: 5177
Quote:
Originally Posted by rubynicholson77056 View Post
Yea ours wasn't on our "Bad Faith Estimate" (good one) either. Our lender is Citi and we were told that this is a lender requirement that is being implemented because a lot of people close, get their tax bill and don't have the funds to pay it.
Yes, banks are punishing the rest of us for their mistakes.
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Old 09-29-2009, 06:58 AM
 
488 posts, read 1,385,141 times
Reputation: 333
Do you have the option to opt out of escrow - that's what we did and then did not have to give the greedy lenders an extra cent. We put the cash we need for property tax in a separate account and let it accrue over the year to make payment at the end of the year. I really don't understand why anyone would give the lenders more of their money to "take care of" - it's not as if they have being doing a great job of that the last few years !!
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Old 09-29-2009, 07:07 AM
 
851 posts, read 3,629,857 times
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Quote:
Originally Posted by ChocolateBabz View Post
Do you have the option to opt out of escrow - that's what we did and then did not have to give the greedy lenders an extra cent. We put the cash we need for property tax in a separate account and let it accrue over the year to make payment at the end of the year. I really don't understand why anyone would give the lenders more of their money to "take care of" - it's not as if they have being doing a great job of that the last few years !!
well, if i don't use escrow, i would have to pay higher interest rate.
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Old 09-29-2009, 07:31 AM
 
Location: Houston, TX (Bellaire)
4,900 posts, read 13,753,312 times
Reputation: 4192
There is usually a certain down payment requirement to be able to opt out of escrow.
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Old 09-29-2009, 08:13 AM
 
1,290 posts, read 5,442,849 times
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Quote:
Originally Posted by rubynicholson77056 View Post
We just closed in July and had to pay 11 months taxes up front. We were told that this is a new lender requirement.
Just to clarify, you are being asked to put 11 months of taxes into escrow, not to pay the government 11 months of taxes for the 6 months you'll own the house this year.

The extra escrow will stay in your account to go toward your taxes next year as well.

You property taxes are prorated with between the buyer/seller for the year at closing.
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Old 09-29-2009, 09:36 AM
 
354 posts, read 2,432,137 times
Reputation: 255
Quote:
Originally Posted by Supermac34 View Post
Just to clarify, you are being asked to put 11 months of taxes into escrow, not to pay the government 11 months of taxes for the 6 months you'll own the house this year.

The extra escrow will stay in your account to go toward your taxes next year as well.

You property taxes are prorated with between the buyer/seller for the year at closing.
Yes that is correct. I think the point we were stressing is having to come up with 11 months of taxes versus the usual 3.
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Old 09-29-2009, 09:47 AM
 
Location: Richmond, TX.
125 posts, read 615,492 times
Reputation: 42
Default opting out of Escrow

Quote:
Originally Posted by ChocolateBabz View Post
Do you have the option to opt out of escrow - that's what we did and then did not have to give the greedy lenders an extra cent. We put the cash we need for property tax in a separate account and let it accrue over the year to make payment at the end of the year. I really don't understand why anyone would give the lenders more of their money to "take care of" - it's not as if they have being doing a great job of that the last few years !!
Opting out of escrow can only happen if you are financing 80% or lower of the value of the house. And on top of that the bank will charge you a Fee, which is a percentage to opt out. I agree Escrow is a rip off half the time it causes problems when the escrow needs to adjust because of an increase in the annual taxes. Having an escrow is worse that an ARM note in a lot of different ways.
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Old 09-29-2009, 02:52 PM
 
332 posts, read 1,388,955 times
Reputation: 337
OP - The seller should cover their prorata share of the property tax, at this point it is 10 months, so that leaves you with one month for the escrow. I'd call the title company for a copy of your hud closing statement. It will list what you are required to bring to the table and what the seller is.
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Old 10-01-2009, 12:55 AM
 
Location: The Greater Houston Metro Area
9,053 posts, read 17,219,964 times
Reputation: 15226
They collect a year of taxes from you - but credit to you the prorated amount that the seller actually owes
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