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Escrow Accounts
What is an escrow analysis and how does it work?
SunTrust Mortgage uses an escrow account to disburse your tax and insurance payments on your behalf.

The escrow analysis helps determine how much money should be deposited into an escrow account to cover future tax and insurance obligations. We perform an annual escrow analysis to determine whether the monthly payment amount needs to be adjusted. Adjustments would be based on payments SunTrust Mortgage has already made on your behalf, what we have to pay in the coming year, and the amount in your escrow account at the time of analysis.

Federal law (Real Estate Settlement and Procedures Act - Regulation X) requires SunTrust Mortgage to perform an escrow analysis annually. If during the course of the year there are significant changes in any of the bill amounts, we might analyze the account more often.

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What are escrow adjustments: overages, shortages and reserves?
Due to the complexities involved in estimating an escrow account, over-collection and under-collection may sometimes occur. If there is a surplus of funds in your account after the annual analysis, this is called an overage. If it's more than $50.00, it will be refunded, provided your loan is current. If it is less than $50.00, your monthly payment is reduced by 1/12 of the amount of the overage.

When funds have been under-collected, a shortage occurs. The amount of the shortage would be the maximum negative amount that your account would reach if an adjustment to your payment were not made. If a shortage does occur, your monthly loan payment will be adjusted to include the escrow payment amount plus 1/12 of your escrow shortage. You also have the option of paying off the shortage in one lump sum.

Your loan documents might also refer to a reserve requirement (or "cushion") in accordance with state and fderal law. This reserve requirement acts as an additional safeguard in the event your tax and/or insurance payments increase. The reserve represents a percentage of your total yearly expenses. In some cases (such as an escrow shortage), we may use some of the reserve amount to assist you in meeting tax and insurance obligations.

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Mortgage products are provided by SunTrust Mortgage, Inc. View our licensing agreement.

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