Mortgage Servicing

Mortgage Servicing Frequently Asked Questions (FAQs)

What is an ACH and how do I sign up?

How do I request funds from the replacement reserve account?

What is an eligible replacement reserve item?

Can I receive a statement of activity for my escrow account?

How are my monthly escrow payments determined for taxes and insurance?

How are my monthly escrow payments determined for mortgage insurance premium (“MIP”)?

How are my monthly escrow payments determined for replacement reserve?

How do I know when a disbursement is made from my escrow account?

 

Q: What is an ACH and how do I sign up?

A: Automated Clearing House (“ACH”) is an alternative, automatic monthly payment method. It saves you time and money by eliminating check writing, postage, and overnight mailing fees. It also avoids costly late fees because your payment is always received on time. ACH even gives you a choice of which day to make the payment. Even though payments are due on the 1st of the month, you can choose any day between the 1st and the 8th of the month to have the payment withdrawn. To sign up for this free service, just complete the attached form (Download ACH authorization form in MS Word or PDF format) and return the original to the servicing manager at Lancaster Pollard Mortgage Company.

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Q: How do I request funds from the replacement reserve account?

A: Please submit a request in writing for withdrawal directly to the project manager at HUD. The request should be specific about what items need to be replaced and why. Proof of payment for work that has been done or equipment purchased should accompany the request. If the cost for replacement of an item or work to be done will exceed $20,000, it is recommended that the project manager at HUD be contacted prior to submitting the written request to discuss the anticipated withdrawal. (For further information regarding replaced reserve requests, please see HUD guide 4350.1 Chapter 4).

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Q: What is an eligible replacement reserve item?

A: Repair or replacement item expenditures that are generally capitalized may often be eligible for payment from a project’s reserve fund, while those expenditures that are expensed are only occasionally eligible for payment from the reserve fund. (For further information regarding replacement reserve accounts, please see HUD guide 4350.1 Chapter 4).

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Q: Can I receive a statement of activity for my escrow account?

A: Yes. Please email or phone us with the information you require. We will email or fax the report to you within one business day.

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Q: How are my monthly escrow payments determined for taxes and insurance?

A: The amount of the last bill, next due date and billing frequency is factored into the monthly payment. The escrow account should have sufficient funds to pay the next bill a month in advance.

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Q: How are my monthly escrow payments determined for mortgage insurance premium (“MIP”)?

A: The premium for mortgage insurance is due on the anniversary of the first principal and interest payment you make. The amount due will decrease every year because it is based upon the average principal balance for the following year. HUD provides an MIP Amortization Schedule within 6-8 weeks after closing. It discloses the amount due every year for the life of the loan. We divide the annual due by 12 to arrive at a monthly figure to collect.

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Q: How are my monthly escrow payments determined for replacement reserve?

A: HUD determines replacement reserve deposits and discloses them in the Regulatory Agreement.

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Q: How do I know when a disbursement is made from my escrow account?

A: After each disbursement, we will mail you a copy of the invoice or bill and a copy of the check used to make the payment.

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