[Trajan]

Gentlemen,

The wife answered the question about the intrest on the escrow account.

From Mrs. Trajan

Sure - the bank keeps the interest. Taxes are paid through your mortgage in most places, which means the bank is taking on an added liability on your behalf. So, with your mortgage payment each month, the bank also collects a portion of your taxes which is then paid quarterly or half yearly depending on where you live. I don't know of any bank that will allow you to pay them one lump sum when the payment is due, because essentially they own the property and must pay the taxes whether you pay them or not. if you default on your mortgage, they can take your house, but even if they turn around a sell it, they can't make up for the back taxes you owe. If your bank is taking too much $$ each month and you wind up with a surplus once your taxes are paid, you are entitled to a quick refund (there is a set time frame for it) and the bank is required to reassess the payment if you request it.

Re: the interest on the money. I don't think the bank sees this as a big revenue source. They have to do a lot of work with each local tax authority to get the tax info in advance to make sure they are charging the right amount. I think the minuscule amount they can get for interest on your $500 or whatever it is doesn't really pay for the time they have to invest.

Cheers!
Trajan

[ August 16, 2002, 15:16: Message edited by: Trajan ]