Real Estate Home Mortgages/escrow reserve requirement


TJ wrote at 2008-05-07 03:41:21
I had the same problem come up on my mortgage through Countrywide within the past month.  I called them today and explained that I had never paid this before and I know that it is "allowed" by law but not a "requirement".  So without any hassle the CSR took it off my bill.  Helps me out.  Now my 40 "extra" bucks a month can cushion my savings account and not some ailing business's.

Ben wrote at 2008-07-08 15:09:30
Bob -- You can call Countrywide and have them remove the Reserve Requirement altogether.  I've done this on both of my mortgages with them.  The agents had no problem doing it.  Just ensure that your escrow doesn't run negative, or else you'll end up having to pay the difference later during your closing when you sell your property, or at the next escrow review.

rhunt wrote at 2009-05-19 01:01:37
I just had Bank of America add $46.00 in reserve requirement!!  Never heard of it before and all the years I've owned a house I have never seen this.  I've been in my new house 1 1/2 and since Bank of America took over for Countrywide this reserve requirement showed up.  

I called Bank of America and they took the $46 off.  If this reserve requirement can and is so easy to take off, why is it added?  Is this a way of Banks making more money from unsuspecting customers???  Good thing I look at my bills closely.

Johnny wrote at 2009-06-25 21:19:37
Last month, I received a similar notice of an Escrow shortage and "reserve requirement",which together added about $100 monthly to my mortgage payment. I called the BOA Customer Service number listed on my statement; and I said that I understand shortages, but I found the "reserve requirement" to be outrageous. With no argument (only an explanation that BOA was authorized to assess such charges), The representative removed the "reserve requirement" amount. This just indicates to me that in the sad state of banking these days, BOA is trying to use their customers' money and hoping the customers don't contest the fee. I have had mortgages with five lenders over the past 25 years, and this is the first time one has tried to assess a "reserve requirement" fee.

Joni wrote at 2009-09-27 16:57:23
I just looked at my bill Countrywide which is now Bank of America.  They added a reserve requirement also which I never had.  I will be calling them tomorrow!!  This is ridiculous what the banks are doing.  Glad I check my bills ..

Joni wrote at 2009-09-28 17:48:53
I emailed the bank on their website and they replied that they could not take it off.

I then called Customer Service and had no problem having the reserve requirement taken off.  And on top of that, the agent told me I had money in a reserve account that I did not know I had which he is now sending back to me.

A. Braxton wrote at 2012-02-19 17:35:01
BOA just added a 70.00 reserve requirement to my payment. I have been a BOA customer for over 6 years and have never had such a charge assessed to my account. This is insane, and clearly an obvious attempt to pad the BOA balance sheet. Shame, Shame, Shame.  

Jason wrote at 2012-08-27 22:52:24
There is a slew of misinformation on this page. If you are looking for actual information about escrow reserves, read below.

The escrow reserve is not an attempt to get more money from customers or beef up balance sheets. Mortgage servicers, such as Bank of America, do not profit from this collection in any way. Like all escrow funds your mortgage servicer collects, the reserve amount is held in a non-interest-bearing account. However, in some states, servicers are required to pay the customer interest on funds held in escrow.

The escrow reserve, as established in RESPA, is a cushion for expected shortages. It is not to exceed 16.6% of all anticipated annual escrow disbursements. New York, Vermont, and Montana have different limits. The escrow reserve is usually put in place when a borrower's escrow account has become negative. Because 16.6% is 1/6, after one year (12 months x 1/6), there will be enough reserve to cover two months of escrow payments, not two months of full PIMI payments.

When an escrow account becomes negative, the loan servicer covers the difference and does not charge interest to the customer for this service. Essentially, the servicer is paying the taxes and insurance for the borrower, and providing an interest-free loan to the borrower if the borrower has failed to meet his or her tax/insurance responsibilities.  

Rp wrote at 2013-10-10 16:03:37
Escrow reserve I am perfectly capable of saving my own money in a emergency fund to pay any escrow shortage I don't need B of A to hold my hand and do it for me I like receiving a bill if I do have a escrow shortage and write out a check that way I know where my money is going anyone who has this reserve added should call and tell them take it off anyone says it's a good thing or ok must be a bank employee.

smartgirl wrote at 2015-03-10 01:15:57
FOUR call and one visit later ...had this fee taken off. Wonder how much money BofA makes on our money every month. Also wonder how many people just pay it???

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Denise Monaco


I can answer questions about home mortgage financing, the difference between a mortgage banker and a mortgage broker, fees involved in purchasing a home and refinancing a home or obtaining a home equity loan and the difference between a 1st & 2nd mortgage and the option to have PMI (Private Mortgage Insurance) Jumbo loans, conforming and non-conforming loans.


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