Tax and Insurance Escrow

Tax and Insurance Escrow. The Veterans’ Home Purchase Board requires all taxes and hazard, flood, and windstorm insurance premiums to be paid through an escrow account. The mortgagor will pay one twelfth (1/12) of the annual real estate taxes, hazard, flood, and windstorm premiums along with each monthly principal and interest payment. The total amount will be considered the mortgagor’s total monthly payments. The Loan Servicing Department, upon renewal of the hazard insurance policy, will perform an annual analysis. Any necessary adjustments to the total monthly payment will be made and the customer notified accordingly. If an escrow account is short of the required escrow balance, designated VHPB personnel will adjust the payment to collect the shortage over the next twelve months. Management approval is required to make an adjustment to a shortage that will exceed twelve months. If a surplus exists in the escrow account, the check will be sent to the mortgagor refunding an amount of $50 or larger. A surplus amount less than $50 will be retained in escrow unless specifically requested by the mortgagor. In no event will a payment be reduced to absorb the excess amount of escrow. Note: Prior to the adoption of this policy, a small number of loans had no tax escrow because of contrary wording in the Deed of Trust and prior agreements with the mortgagor. These loans are monitored annually to ensure the mortgagor pays the real estate taxes.