Can a lender require an escrow account for taxes and insurance when doing a refinance?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Can a lender require an escrow account for taxes and insurance when doing a refinance?
Condo loan amount is $326,000 and all payments have been made on time for several years. Refi being done with same, original lender. Condo owner occupied. Lender claims right to mandate escrow account under state law.
Asked on October 7, 2011 under Real Estate Law, California
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
It seems from what you have written that the lender for the current loan's refinance wants an impound account for property taxes and insurance to safeguard its interests with respect the loan that you may obtain with it.
If this is the case, carefully read your loan agreement with this particular lender in that its terms and conditions control the obligations owed to you by the lender and vice versa in the absence of conflicting state law.
If the lender requires as a condition of loan approval an impound account for property taxes and insurance, it can do so. Your option if you do not like this condition is to seek a loan from another lender that does not have that requirement.
Good luck.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.