Escrow Accounts: Frequently Asked Questions

1. What is an escrow account?
   An escrow account is a separate account set up by North Brookfield Savings Bank to pay certain property-related expenses, like property taxes and homeowners & flood insurance (if applicable), on your behalf.

2. How is my escrow payment calculated?
   North Brookfield Savings Bank estimates the yearly costs of property taxes and insurance, then divides that amount by 12 to determine your monthly escrow payment. An additional cushion (usually up to 2 months’ worth of payment) may be included as allowed by law.

3. What is an escrow analysis?
   An escrow analysis is a review the bank performs every April, to compare the actual escrow account balance with projected expenses. Based on this, your monthly payment may change starting with your June payment to ensure enough funds are available.

4. What is an escrow shortage/deficiency or overage?
   An escrow shortage occurs when the required escrow account starting balance is larger than the actual current escrow account balance. This is caused by the tax/insurance payments that were made over the past 12 months being higher than what was originally projected. An escrow deficiency occurs when the current escrow balance is negative. The deficiency is the amount needed to bring the escrow balance to $0.00. This is also caused when the tax/insurance payments made over the past 12 months were higher than projected. If an escrow shortage/deficiency occurs, we will add these amounts to your monthly escrow payment spread over the next 12 months.An escrow overage occurs when there are more funds in your escrow account than are anticipated to be needed to cover your taxes and/or insurance payments after the analysis. If the surplus is more than $50, a check for the overage will be sent to you separately. If the surplus is less than $50, your payment will be lowered accordingly. If your account is delinquent, we will hold your escrow surplus until payments are brought current.

5. Why did my payment change?
   Every year there is a possibility of either an increase or decrease in your property taxes and/or insurance disbursements. As a result, once a year your escrow payment may be adjusted to ensure that enough is collected to pay these items.

6. Who do I contact to dispute an increase in property tax or insurance?
   North Brookfield Savings Bank pays the amount billed by your tax collector or insurance company. We do not determine the amounts of your taxes or insurance. Please contact your local tax authority for information pertaining to tax amounts, or your insurance carrier, to discuss your policy.