Everyday mortgage professionals come across clients that have experienced, or know someone who currently is experiencing an escrow shortage. Escrow shortages are very common and create financial hardships to homeowners. Often homeowners in newly developed neighborhoods experience escrow shortages, being that tax values in these neighborhoods are based on unimproved land (as opposed to the total value of the new home and the property).
When you hear the words "escrow shortage" take a few minutes to explore the address and cross reference other streets in the neighborhood. Often times when a client has experienced an escrow shortage, odds are that several homeowners on the street, or neighborhood, are experiencing the same.
New homeowners need to be very careful of escrow shortage. They can avoid this by doing escrow on their own, sending extra money towards escrow or closely monitoring their escrow account.
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