What we verified in “Your first year as a homeowner: escrow, taxes and insurance”

Statements and where we checked them

The statements with rules, figures or dates, with the exact place in the source and the date we checked them.

1. According to the CFPB, your mortgage lender is the institution that loaned you the money and your mortgage servicer is the company that sends you your mortgage statements and handles the day-to-day tasks of managing your loan; it is common for a different company to take over as servicer after you take out the loan; the servicer typically processes your payments, responds to your inquiries, keeps track of principal and interest paid and manages your escrow account if you have one; to find out who your servicer is, check your monthly statement or payment coupon book, and if you cannot find either you can call the MERS Servicer Identification System, run by a private company, toll-free at (888) 679-6377.

   Sources 1 · What's the difference between a mortgage lender and a mortgage servicer? (last reviewed December 11, 2024): 'Your mortgage servicer is the company that sends you your mortgage statements and handles the day-to-day tasks for managing your loan'; 'check your monthly mortgage statement or payment coupon book'; 'MERS® Servicer Identification System toll-free at (888) 679-6377'; 'MERS® is a private company'; 'it's common for a different company to take over your loan as the mortgage servicer'; 'processes your loan payments, responds to your inquiries, keeps track of principal and interest paid, and manages your tax and insurance escrow account' · Checked October 17, 2026

2. Under Regulation Z, the servicer must give you a periodic statement for each billing cycle showing, among other things, the payment due date, the late payment fee and the date it will be imposed, how much of the payment goes to principal, interest and escrow, a toll-free number for questions about your account and where to find the CFPB or HUD list of housing counselors; the rule does not apply to fixed-rate loans with a coupon book that meets certain conditions or to loans handled by a small servicer.

   Sources 2 · 12 CFR §1026.41(a)(2) ('for each billing cycle, a periodic statement'), (d)(1) ('The payment due date'; 'The amount of any late payment fee, and the date on which that fee will be imposed'), (d)(2)(i) ('a breakdown showing how much, if any, will be applied to principal, interest, and escrow'), (d)(6) ('A toll-free telephone number'), (d)(7)(v) ('the Bureau list or the HUD list of homeownership counselors'), (e)(3) ('Coupon books… do not apply to fixed-rate loans if the servicer') and (e)(4) ('Small servicers') · Checked October 17, 2026

3. Under Regulation X, when an escrow account is a condition of the loan, the servicer gives you an initial escrow account statement at closing or within 45 calendar days of closing; it includes your monthly payment and the part going into escrow, itemizes the taxes, insurance premiums and other charges it expects to pay during the year with their expected dates, and shows the cushion it chose.

   Sources 3 · 12 CFR §1024.17(g)(1): 'at settlement or within 45 calendar days of settlement for escrow accounts that are established as a condition of the loan'; (g)(1)(i): 'the amount of the borrower's monthly mortgage payment and the portion of the monthly payment going into the escrow account'; 'itemize the estimated taxes, insurance premiums, and other charges'; 'the anticipated disbursement dates'; 'the amount that the servicer selects as a cushion' · Checked October 17, 2026

4. Under Regulation X, when servicing changes hands, the old servicer must notify you at least 15 days before the effective date of the transfer and the new servicer no more than 15 days after it (they may send a single notice at least 15 days before; there are exceptions, such as certain transfers between affiliates with no change in payee, address, account number or payment); the notice includes the effective date, the name, address and a collect-call or toll-free number for each company, the date the old servicer stops accepting payments and the date the new one starts, and a statement that the transfer does not affect any term of the loan other than those directly related to servicing; during the 60 days starting on the effective date, if the old servicer receives your payment on or before the due date (including any grace period), the payment may not be treated as late.

   Sources 4 · 12 CFR §1024.33(b)(2)(i) (excluded transfers), (b)(3)(i) ('not less than 15 days before the effective date'; 'not more than 15 days after the effective date'; 'may provide a single notice'), (b)(4)(i)–(iv) and (vi) ('does not affect any term or condition of the mortgage loan other than terms directly related to the servicing') and (c)(1) ('During the 60-day period… a payment may not be treated as late for any purpose') · Checked October 17, 2026

5. According to the CFPB, if your servicer changes you will need to send your payments to the new servicer after a certain date; pay attention to that date and allow extra time if you pay by mail, tell your bank or credit union if your payment is automatic, and review your statement to confirm payments are credited correctly; if you have problems because of the transfer, you can send both servicers an information request or a notice of error, for example if you never received a transfer notice or your payments are not being applied correctly.

   Sources 5 · What happens if the company that I send my mortgage payments to changes? (last reviewed April 3, 2024): 'you will need to start sending your monthly payments to the new servicer after a certain date'; 'Be sure to account for additional time if you send your mortgage payments by mail'; 'you will need to tell your bank or credit union to make those payments to the new servicer'; 'Carefully review your monthly mortgage statement'; 'send both your old and new servicers an information request or a notice of error' · Checked October 17, 2026

6. According to the CFPB, an escrow account (sometimes called an impound account) is set up by your lender to pay certain property-related expenses out of part of your monthly payment; many lenders require you to pay taxes and insurance through escrow, and your servicer manages the account and pays those bills for you; because property taxes and insurance premiums can change from year to year, your escrow payment and your total monthly payment change accordingly; if your loan has no escrow account, you have to plan to pay those bills yourself; if you fail to pay property taxes, your state or local government may impose fines and penalties or place a tax lien on your home and you could face foreclosure; and if you fail to pay taxes or insurance, your lender may add the amounts to your loan balance, add an escrow account or buy force-placed insurance, which is typically more expensive.

   Sources 6 · What is an escrow or impound account? (last reviewed September 11, 2024): 'set up by your mortgage lender to pay certain property-related expenses'; 'Many lenders require that you pay your taxes and insurance using escrow'; 'Your property taxes and insurance premiums can change from year to year'; 'you will have to plan to pay these large expenses yourself'; 'may impose fines and penalties or place a tax lien on your home'; 'Add the amounts to your loan balance'; 'Add an escrow account to your loan'; 'force-placed insurance, is typically more expensive' · Checked October 17, 2026

7. Under Regulation X, the servicer must analyze the escrow account at the end of each computation year to set your payments for the next year and send you an annual statement within 30 days; the statement shows your current and past monthly payment and the escrow portion, the total paid into the account, the total paid out for taxes, insurance and other charges, the ending balance and how any surplus, shortage or deficiency will be handled; the cushion may be no more than one-sixth of the estimated total annual payments from the account; and if the servicer does not know next year's charge, it may base its estimate on the preceding year's charge (or adjust it by no more than the most recent change in the Consumer Price Index).

   Sources 3 · 12 CFR §1024.17(c)(3) ('at the completion of the escrow account computation year'), (i) ('within 30 days of the completion of the escrow account computation year'), (i)(1)(i)–(vii), (c)(1)(ii) ('a cushion no greater than one-sixth (1/6) of the estimated total annual payments from the account') and (c)(7) ('may base the estimate on the preceding year's charge') · Checked October 17, 2026

8. Under Regulation X, if the analysis shows a surplus of $50 or more, the servicer must refund it within 30 days of the analysis; if it is under $50, the servicer may refund it or credit it against next year's escrow payments; this applies if you are current, meaning the servicer receives your payments within 30 days of the due date; for a shortage of less than one month's escrow payment, the servicer may leave it alone, ask you to repay it within 30 days or in equal monthly payments over at least 12 months; for a shortage of one month's payment or more, it may leave it alone or ask you to repay it in equal monthly payments over at least 12 months; and for a deficiency (a negative balance), it may require additional monthly deposits: within 30 days or in two or more equal monthly payments if it is less than one month's escrow payment, and in two or more equal monthly payments if it is one month or more (or leave it alone).

   Sources 3 · 12 CFR §1024.17(f)(2)(i) ('within 30 days from the date of the analysis, refund the surplus to the borrower if the surplus is greater than or equal to 50 dollars ($50)'), (f)(2)(ii) ('A borrower is current if the servicer receives the borrower's payments within 30 days of the payment due date'), (f)(3)(i)–(ii) ('equal monthly payments over at least a 12-month period') and (f)(4)(i)–(ii) ('2 or more equal monthly payments') · Checked October 17, 2026

9. Under Regulation X, the servicer must pay taxes and insurance from escrow on time, that is, on or before the deadline to avoid a penalty, as long as your payment is not more than 30 days overdue, and must advance funds if needed; it may then ask you to repay that deficiency under the analysis rules.

   Sources 3 · 12 CFR §1024.17(k)(1) ('on or before the deadline to avoid a penalty, as long as the borrower's payment is not more than 30 days overdue') and (k)(2) ('The servicer must advance funds to make disbursements in a timely manner'; 'may seek repayment from the borrower for the deficiency') · Checked October 17, 2026

10. Under Florida Statutes section 193.155, property under the homestead assessment is assessed at just value as of January 1 of the year following a change of ownership.

    Sources 7 · Fla. Stat. §193.155(3)(a): 'shall be assessed at just value as of January 1 of the year following a change of ownership' · Checked October 17, 2026

11. According to the California State Board of Equalization, the homeowners' exemption is a $7,000 reduction in the taxable value of a home that was the owner's principal residence on the lien date, January 1; it is claimed with a one-time filing with the county assessor on form BOE-266; a first-time filer may file any time after becoming eligible, but no later than February 15 to receive the full exemption for that year; and the owner must notify the assessor when no longer eligible.

    Sources 8 · Homeowners' Exemption: 'a $7,000 reduction in the taxable value for a qualifying owner-occupied home'; 'principal place of residence of the owner on the lien date, January 1st'; 'one-time filing with the county assessor'; 'BOE-266'; 'no later than February 15 to receive the full exemption for that year'; 'responsible for notifying the assessor when they are no longer eligible' · Checked October 17, 2026

12. Under Florida Statutes section 196.011, anyone who holds legal title on January 1 to property entitled to an exemption must file an application with the county property appraiser on or before March 1; failing to apply on time, when required, waives the exemption for that year, except as the statute provides; and once an exemption is granted, the property appraiser mails a renewal application each year on or before February 1.

    Sources 9 · Fla. Stat. §196.011(1)(a) ('on January 1, has the legal title'; 'on or before March 1 of each year, file an application for exemption with the county property appraiser'; 'shall constitute a waiver of the exemption privilege for that year') and (7)(a) ('in each succeeding year on or before February 1, the property appraiser shall mail a renewal application') · Checked October 17, 2026

13. According to the CFPB, homeowner's insurance pays for losses and damage to your property if something unexpected happens, like a fire or burglary; when you have a mortgage, lenders generally require proof that you have it; many homeowners pay it through escrow as part of the monthly payment and the lender pays the bill from that account when it is due; you can shop separately and choose the provider and plan; and standard homeowner's insurance does not cover damage from earthquakes or floods, though it may be possible to add that coverage.

    Sources 10 · What is homeowner's insurance? Why is homeowner's insurance required? (last reviewed August 8, 2024): 'pays for losses and damage to your property if something unexpected happens, like a fire or burglary'; 'lenders generally require proof that you have homeowner's insurance'; 'when the bill for the insurance is due, the lender pays it from the escrow account'; 'You can shop separately for homeowner's insurance'; 'doesn't cover damage from earthquakes or floods, but it may be possible to add this coverage' · Checked October 17, 2026

14. According to the CFPB, if you fail to keep your home insured, your lender usually has the right to buy force-placed insurance and charge you for it; it is usually more expensive than a policy you buy and generally protects only the lender; the servicer must warn you at least 45 days before it charges you, and you can use that time to shop for a policy and send the servicer proof that you have insurance.

    Sources 11 · Your mortgage servicer must comply with federal rules, 'Notification about force-placed insurance': 'your lender usually has the right to buy “force-placed insurance” and charge you for it'; 'usually more expensive than a policy you buy, and it generally protects only the lender'; 'must warn you at least 45 days before it charges you'; 'send proof to the servicer that you have insurance' · Checked October 17, 2026

15. According to FEMA (FloodSmart, the National Flood Insurance Program site), a flood insurance policy does not renew automatically and must be renewed every year; your insurance company and the NFIP send renewal reminders before it expires, and the date also appears on your policy declaration; if your lender requires flood insurance, you may be able to pay the premium through escrow; and if you let the policy lapse, a new one takes 30 days to go into effect, you are not covered if a flood happens in that time and you may lose certain discounts.

    Sources 12 · How to renew your flood insurance policy: 'Your flood insurance policy does not renew automatically'; 'you need to renew your policy every year'; 'will send renewal reminders before it expires'; 'check your policy declaration for the expiration date'; 'You may be able to pay your premium through an escrow account'; 'it will take 30 days to go into effect'; 'You may also lose certain discounts if your policy lapses' · Checked October 17, 2026

16. Under the federal flood insurance law, regulated lending institutions may not make, increase, extend or renew a loan secured by a building in a special flood hazard area where flood insurance is available unless the building is covered by flood insurance for the term of the loan in an amount at least equal to the outstanding principal balance or the maximum coverage available, whichever is less; if the lender or servicer finds that coverage is missing, it must notify you to buy it at your expense, and if you do not buy it within 45 days of the notice, it must buy it on your behalf and may charge you for it.

    Sources 13 · 42 U.S.C. §4012a(b)(1)(A) ('not to make, increase, extend, or renew any loan'; 'covered for the term of the loan by flood insurance in an amount at least equal to the outstanding principal balance of the loan or the maximum limit of coverage… whichever is less') and (e)(1)–(2) ('should obtain, at the borrower's expense'; 'If the borrower fails to purchase such flood insurance within 45 days after notification') · Checked October 17, 2026

17. According to IRS Publication 530, keeping full and accurate records is vital to report income and expenses, support deductions and credits and know the basis (or adjusted basis) of your home; these records include your purchase contract and settlement papers, and you should keep receipts, canceled checks and similar evidence for improvements; basis records are kept for as long as you own the property and, after you dispose of it, for the period of limitations that applies to you; an improvement materially adds to the value of your home, considerably prolongs its useful life or adapts it to new uses (for example, another bathroom, a fence, new plumbing or wiring, a new roof), its cost is added to the basis and cannot be deducted; a repair keeps your home in ordinary, efficient operating condition (for example, repainting, fixing gutters, floors or leaks, replacing broken window panes), cannot be deducted and generally cannot be added to the basis.

    Sources 14 · Publication 530 (2025), 'Keeping Records': 'Keeping full and accurate records is vital'; 'These records include your purchase contract and settlement papers'; 'keep any receipts, canceled checks, and similar evidence for improvements'; 'for as long as you own the property and after you dispose of it for the period of limitations'; 'Improvements': 'materially adds to the value of your home, considerably prolongs its useful life, or adapts it to new uses'; 'You can't deduct these costs'; 'Repairs versus improvements': 'keeps your home in an ordinary, efficient operating condition'; 'You can't deduct repair costs and generally can't add them to the basis' · Checked October 17, 2026

18. According to IRS Publication 530 (2025), if you paid $600 or more of mortgage interest (including certain points) during the year on any one mortgage to a mortgage holder in the course of its business, you should receive a Form 1098 or similar statement showing the total interest you paid during the year; if you bought a main home during the year, it also shows the deductible points you paid; the interest you paid at settlement should be included; the mortgage interest statement for 2025 was to be provided or sent by January 31, 2026; and to deduct the expenses of owning a home you must itemize your deductions on Schedule A (Form 1040), and if you itemize you can't take the standard deduction.

    Sources 14 · Publication 530 (2025), 'Mortgage Interest Statement': 'If you paid $600 or more of mortgage interest (including certain points during the year) on any one mortgage'; 'you should receive a Form 1098 or similar statement from the mortgage holder'; 'The statement will show the total interest paid on your mortgage during the year'; 'If you bought a main home during the year, it will also show the deductible points you paid'; 'The interest you paid at settlement should be included on the statement'; 'Your mortgage interest statement for 2025 should be provided or sent to you by January 31, 2026'; section on what you can and can't deduct: 'itemize your deductions on Schedule A (Form 1040)'; 'If you itemize, you can't take the standard deduction' · Checked October 17, 2026

19. According to the IRS, the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs offer free basic tax return preparation to qualified individuals; the IRS does not set a program-wide income limit, but individual VITA sites may set their own; many sites help people with incomes below a certain level, persons with disabilities and limited English-speaking taxpayers; and TCE focuses on people 60 and older.

    Sources 15 · Free tax return preparation for qualifying taxpayers: 'offer free basic tax return preparation to qualified individuals'; 'While the IRS does not set a program-wide income limit, individual VITA sites may establish their own'; 'Many sites offer free tax help to people who need assistance in preparing their own tax returns'; 'Persons with disabilities'; 'Limited English-speaking taxpayers'; 'particularly for those who are 60 years of age and older' · Checked October 17, 2026

20. According to the CFPB, if your servicer does not properly apply a payment, charges improper fees or fails to pay taxes, insurance or other charges on time, you should send it a written notice of error; if the servicer has set up a special address for notices of error and information requests, you must use that address, which appears on your periodic statement or coupon book and on its website; it cannot charge you for responding; it generally has five days (excluding weekends and holidays) to acknowledge your letter and 30 business days to resolve the issue or explain why it believes no error was made, with a possible 15-day extension if it notifies you in advance and gives its reasons; and if you report an error about a payment, it may not send negative information about that payment to a credit reporting company for 60 days after receiving your notice.

    Sources 11 · Your mortgage servicer must comply with federal rules, 'Process for resolving errors and information requests': 'you should send your servicer a written notice of error'; 'you must use that address'; 'not allowed to charge a fee or require a payment for responding to you'; 'generally has five days (excluding weekends and holidays) to acknowledge your letter'; 'the servicer has 30 business days to resolve the issue'; 'extend the time period an additional 15 days'; 'not allowed to send negative information to a credit reporting company regarding that payment for 60 days' · Checked October 17, 2026

21. The Rhode Island Attorney General's office warned about letters titled 'deed processing notice' that offer a 'complete deed and property profile' for a fee: they look official because they list property information such as parcel identification; they target recent home buyers shortly after closing and urge them to respond quickly; according to the Attorney General, the title company should process the deed when you buy, a copy can be obtained from the Town Clerk's office for a few dollars, and these letters do not come from a government agency but from private companies.

    Sources 16 · AG Kilmartin Warns Homeowners of Deceptive Solicitation for 'Deed and Property Profile' (December 13, 2012): 'deed processing notice'; 'The notices look official, listing the property information, including parcel and zone identification'; 'Recent home buyers are targeted and urged to respond quickly'; 'shortly after a property closes'; 'your title company should process the deed'; 'from your Town Clerk's office for a few dollars'; 'These solicitations do not come from a governmental agency; they are private companies' · Checked October 17, 2026

22. The Virginia Attorney General's office warned about official-looking letters, often titled 'Deed Processing Notice', that offer to sell owners a copy of their deed and use language suggesting a response is required by a certain date; according to the Attorney General, they are solicitations and should be treated as such, most owners receive a copy of their deed at the time of purchase, no one is obligated to pay these companies, buy a copy or act by an artificial deadline, and copies are usually available from the local clerk of court at a much lower rate.

    Sources 17 · Attorney General Herring warns homeowners to be cautious of letters that urge them to buy copies of their home deed (March 6, 2014): 'official looking letters, often titled as a "Deed Processing Notice,"'; 'they are actually solicitations and should be treated as such'; 'Most home and property owners will receive a copy of their deed at the time of purchase'; 'under no obligation to take action by any artificial deadline'; 'under no obligation to pay these entities or to purchase a copy of their deed'; 'usually available from the local clerk of court at a much lower rate' · Checked October 17, 2026

23. According to the CFPB, mortgage assistance and foreclosure relief scams use mail with designs, logos or names that look like government agencies, and the warning signs are: they tell you to stop making mortgage payments, charge up-front fees, ask you to pay someone other than your lender or servicer, try to get you to sign over title to your property, push you to sign papers you do not understand or to act immediately, or say they are doing a 'forensic audit' of your loan; real government officials never ask for payment to help you; mortgage assistance companies are not allowed to collect fees up front, only after they work out a deal with your lender that you want to accept; and HUD-approved housing counselors are available at no cost if you are having trouble paying.

    Sources 18 · How to spot and avoid foreclosure relief scams: 'designs, emblems, logos, or names that look or sound like government agencies'; 'Tells you to stop making mortgage loan payments'; 'Charges up-front fees'; 'Asks you to make your payments to someone other than your lender or servicer'; 'Tries to get you to sign over title to your property'; 'Says they're doing a “forensic audit” of your loan'; 'Real government officials never ask for payment to help you'; 'aren't allowed to collect any fees up front'; 'HUD-approved housing counselors are available at no cost to you' · Checked October 17, 2026

24. According to the CFPB, if anyone asks you for upfront fees, promises a loan modification, asks you to sign over title or to pay someone other than your servicer, you can report that company by submitting a complaint to the CFPB online or by calling (855) 411-2372; you can also contact your state attorney general's office to file a complaint.

    Sources 19 · What are mortgage loan modification scams? (last reviewed September 11, 2024): 'you can report that company by submitting a complaint with the CFPB online or by calling (855) 411-CFPB (2372)'; 'You can contact your state attorney general's office… as well as file a complaint' · Checked October 17, 2026

25. HUD-approved housing counselors provide independent advice on buying a home, renting, defaults and credit issues, often free or at low cost.

    Sources 20 · Find a Housing Counselor: 'advice on buying a home, renting, defaults, forbearances, foreclosures, and credit issues'; 'often at little or no cost to you' · Checked October 17, 2026