Mortgage escrow is short

[JoeH]

macphanatic wrote:
[quote=vicrock]
Or, you could just not do the escrow at all and pay taxes and insurance yourself. That's what we do.

Not all mortage companies give you the option unless it's required by state law.
It is required by federal law once you have met the point of having at least 20% equity and are out of an initial time period on a loan that required escrow for being under 20%.

[TLB]

JoeH wrote:
[quote=macphanatic]
[Not all mortage companies give you the option unless it's required by state law.

It is required by federal law once you have met the point of having at least 20% equity and are out of an initial time period on a loan that required escrow for being under 20%.
Isn't that in reference to PMI, rather than escrow. I thought escrow provisions were a clause in the mortgage contract.

[JoeH]

They are a clause in contracts, but at one time they were linked to the PMI provisions. If PMI was no longer required, then escrow could not be required for mortgages to be sold on the open market. It looks like they changed that at some point, can't find when though. But it looks like about 10 years ago. There is another change coming along in April 2010. Under the new Federal regulations, the so-called sub-prime mortgages will be required to have an escrow account, with it possible for the lender to end that after a year. The actual language is for "higher-priced loans" that are "first-lien loans" on a home. Except for that rule coming in, you can negotiate off the escrow requirement in many areas.