Mortgage Monday

We get lots of comments from our blog posts or people just reach out to ask a question.  Here is a great one concerning switching insurance companies and how it can mess up your escrow account with your mortgage lender.

 

Question

 

I cancelled my house insurance and got another policy on June 30, 2011 and my new home insurance started 7/3/11. The new company alerted the old company of the cancellation. Now my mortgage company has paid both companies for insurance and I have over a 3,000 escrow shortage. What can I do?

Amy H. from Herrin, Illinois

 

Answer:

 

Here is what you do. Call up and ask for a supervisor in customer service.

 

Make sure you have the following documents in front of you:

 

• Old policy
• Cancelation of old one
• New one
• your loan number

 

Tell them what happened

 

Ask if the old company should return the money directly to your lender or send to you and you can then forward it to pay off the escrow shortage.

 

Contact customer service from the old company and tell them they need to return the payment immediately and to whom

 

Ask the new company to follow up and assist you in getting the escrow account straightened out!

 

GET names, direct telephone numbers and email address- if you CC everybody in the emails they will take care of it together.

 

Shouldn’t be more than just a pain in the neck! 

 

To avoid this from happening, it would be best to call customer service with the lender before you switch to let them know what you are doing – this way they will make a note in the file and not automatically pay two insurance companies (which was kind of dumb in the first place).