You start an escrow account to pay all of your tax and/or insurance fees that come along with owning a home. This may include property taxes, mortgage insurance, flood insurance and/or hazard insurance. GreenPoint Mortgage will calculate your escrow deposit according to federal guidelines in the Real Estate Settlement Procedure Act Regulation X Final Rule.

GreenPoint will calculate all of your bills for the year and divide the sum of all your bills by 12 (tally of months in a year) to determine what your monthly escrow deposit should be.

In many states you may also have what is considered a two-month cushion (money set aside) in case the insurance or taxes increase or a payment is late and given a late fee. That means that your escrow account balance should never be less than two months of escrow deposits.

If your account has a surplus less or equal to $50, the surplus has been prorated so you owe less for your monthly escrow deposit. If the surplus is more than $50, a refund was given to you. Remember that the surplus has been taken from your projected escrow balance so that your next 12 month history can be predicted.

Like any credit account, if there is less in your account than what is due, GreenPoint Mortgage Funding, Inc. will have to pay for it. The shortage can be paid incrementally over the 12 months or you can pay it all at once.

Either way your future escrow bills will be higher. Paying it at once is a better option if you can afford it because if you pay it over the 12 months you are paying for the previous year’s shortage in addition to the current hike in payment.

GreenPoint realizes the increase in tax or insurance can be aggravating, but has no control over this and informs you to contact your insurance company if you have questions about the amounts of these bills.

You should know that a deficiency in your account should only be a result of negative or insufficient funds. In this situation, GreenPoint usually advances you funds to pay the bills but will charge you more in return.

You will receive escrow statements in the mail that outline your escrow account activity and the amounts that have been billed and paid and so on. You may want to keep these statements should a question or concern arise regarding your account.