Are Escrow Payments Pushing You Toward Mortgage Foreclosure?
You might think that you lucked out by getting a fixed rate mortgage instead of an adjustable-rate mortgage. Adjustable-rate mortgages are a constant source of stress. Once the adjustment begins, your mortgage payment can increase dramatically from one pay period to the next. It is a race against time to refinance your mortgage, increase your income, or live below your means before your mortgage payment balloons out of control. If you have a fixed-rate mortgage, you do not have to worry about the interest rate increasing, but there is another way that your monthly mortgage payment can become more expensive than it was on the last mortgage statement, even as you continue paying down the principal. The escrow you pay on your mortgage can get more expensive over time, and hardly anyone feels this more acutely than homeowners in Florida. If your mortgage payment has recently increased dramatically because of escrow increases and you are worried about whether you will be able to continue keeping up with your mortgage payments, contact a Jupiter foreclosure defense lawyer.
What Is a Mortgage Escrow Account?
A mortgage escrow account is a fund that your mortgage loan servicer uses to pay expenses associated with your home mortgage. These typically include property taxes and homeowners’ insurance. If your loan requires you to carry mortgage insurance, this payment comes from the escrow account, too. Each year, the lender estimates how much you will need to pay into your escrow account. You have the option to pay it in a lump sum as soon as you receive the bill. If you do not pay it at that point, the lender divides the amount you owe into twelfths and adds them into your mortgage payment over the next year.
This is not a new system, and in the past, it was not a problem. The amount you owed was so small that some people could pay it upfront. If you divided it over your next 12 mortgage statements, it would increase your payment by less than $100. Meanwhile, mortgage escrow charges have increased by 45 percent nationwide since 2019. In Florida, they have increased by 70 percent. A major contributing factor to this increase is the astronomical cost of homeowners’ insurance in Florida, where major hurricanes are a question of when, not if.
What to Do If Escrow Has Caused Your Monthly Mortgage Payment to Grow Beyond What You Can Afford
If the new normal escrow charges have turned your affordable mortgage payment unaffordable, you have several options. Refinancing is the most desirable option, but if you could easily get a refinance, you would have done that already. You can contact your lender and try to extend the term of your mortgage. Another option is to settle or consolidate other debts to free up funds for your mortgage payment.
Work With a Debt Lawyer About Mortgage Escrow Stress
A South Florida debt lawyer can help you if escrow charges are making it difficult to afford your mortgage payment. Contact Nowack & Olson, PLLC in Jupiter, Florida to discuss your case.
Source:
cnbc.com/2026/05/17/mortgage-escrow-shortages.html
