"Richard" wrote...
I understand how they do it. That part is real easy. Work up the amortized
loan package. Check your reference chart for estimated nominal taxes and
insurance for this type property in that local. Add them up. Divide by
twelve. Round up. Principle + interest + 1/12 escrow = payment. Simple. My
first ex-wife, with a HS diploma, did it for Caprock Savings in Monahans, TX
back before oil went bust.

That's the way they SHOULD do it... However, that doesn't maximize their
take -- at your expense...


I just don't understand why they should have had to "estimate" or even
"calculate it" when they have solid hard factual information at their finger
tips. When you have an established escrow payment history, stored in their
own computer system, and fail to consult it during the function of
refinancing a existing loan, you can't make excuses why the insurance
payment is off by over a thousand dollars. I can tolerate ignorance. This
falls under the heading of "real f_ck_ng stupid".

Actually, it's closer to deliberate fraud that simple stupidity.

First they calculate the 1/12. Then they add some 'cushion' (say, $500) to make
sure your account doesn't get anywhere near 0 any time during the year. Then
they add some 'J factor' (say, 20%), which is what they think the insurance
premium and tax COULD increase NEXT year, given worst case. Maybe they have
some other additive, just 'because they can.' THEN they add the statutory 2
months 'reserve' allowed by law -- at their already-inflated rate.

Then they absolutely refuse to pay you interest on YOUR money that they are
holding for THEIR "protection."

Finally, they make late payments, requiring late fees and/or generating dunning
notices to YOU from the insurance company and/or tax office. When you complain
and ask them to refund the penalty fees THEY caused by their incompetence, they
refuse to talk to you.

Granted, not every mortgage company is this bad. OTOH, I have seen pieces of it
in almost every one I've dealt with...