Get Out Of My Pocket (9/13)

The first of a (hopefully short) series on how companies try to get me to give them extra money

Back in July, I received my mortgage bill, along with an escrow account review. It was a year after my wife and I bought our new house and the company that holds our mortgage chose that time to review taxes and insurance payments that come from them.

Our total bill was to increase by over $100. The fact there was an increase was not surprising as property rates in Montgomery County have been rising with great speed over the last few years. The size of the increase was surprising. Further investigation into the review found a ‘reserve requirement’ of about $80. I spoke to the realtor who helped sell our old home; neither he nor a mortgage contact he uses had ever heard of such a charge. It seemed legitimate; our mortgage company even had a breakdown of how the reserve requirement was determined. I finally called the company to get information on this charge. It turns out the reserve requirement is there to provide a cushion on my escrow account in case of any tax or insurance increase. If, at the end of the fiscal year, there is still money in the escrow account, that money is returned.

In other words, an interest free loan to the mortgage company. Luckily, I could ask for the reserve requirement to be removed. Which I did.

Fast forward today. I get another escrow account review in the mail (the company is settling into reviewing the account at the beginning of the fiscal year). And, shockingly enough, they tried to sneak the reserve requirement past me a second time. I quickly called and had it taken off. Again. I have a feeling I’ll be doing this every year until we have no mortgage.