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Alex Esquire
Alex Esquire, Attorney at Law
Category: Real Estate Law
Satisfied Customers: 16721
Experience:  Experienced Licensed Attorney / Real Estate Law Mentor
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Can your mortgage company open an escrow account without

Customer Question

Can your mortgage company open an escrow account without your knowledge, for services we already had with another company?
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Alex Esquire replied 1 year ago.

Hello. My name is Alex.
Thank you for your question.
I will be happy to provide you with information you are seeking for educational purposes only.

What services are you referring to?

Customer: replied 1 year ago.
we never had an escrow account with our mortgage company. we just learned they cancelled our insurance with our insurance company and told them we wanted them to takeover. We did not.
Customer: replied 1 year ago.
Did you get it?
Expert:  Alex Esquire replied 1 year ago.

Thank you for your follow up.

Unfortunately, the mortgage lender in fact has the right to require mortgage borrower to pay money into an escrow for the homeowner's insurance which protects bank's collateral (the mortgaged house) and most mortgage agreements contain such terms which allow the mortgage lender / bank to do the above.

So, generally, it is a good idea to review the mortgage agreement which more than likely contains such terms that allow mortgage lender to purchase insurance coverage and to require mortgage borrower to forward money to the mortgage lender's escrow account.

I am very sorry to provide you with this bad news, but please understand that I do have professional obligation to provide customers with correct answers, even when answer is not favorable to the customer.

I wish you the best of luck and God bless you!