What is an escrow account?
Think of it like a savings account dedicated to the tax and/or insurance expenses required for your property—and as your loan servicer, we help you manage it. Depending on the terms of your mortgage, your escrow account may be set up for property taxes, homeowner's/hazard insurance, flood insurance, and/or mortgage insurance. A portion of your monthly mortgage payment is deposited into your escrow account, and these funds are reserved to pay your tax and/or insurance bills when they are due.
How does escrow work?
Each month, we deposit a fixed portion of your mortgage payment into your escrow account to cover your expected tax and/or insurance expenses, plus a little extra money in case these expenses increase from year to year—this is known as a cushion. Then, we pay each bill out of your escrow account on your behalf.
Since tax and insurance bills can change from year to year, we review your escrow account at least annually to make sure your balance is sufficient. Then, we send you an Escrow Account Disclosure Statement to inform you of any changes in your escrow activity, as well as any corresponding changes to your monthly payment.
What are the advantages of having an escrow account?
Having an escrow account can save you time and make homeownership easier. Escrow helps you budget for large expenses required for your property, giving you peace of mind. We fully manage the account for you, paying your tax and/or insurance bills on your behalf when they are due. We also review your escrow activity at least annually to help ensure the balance is sufficient based on your expected expenses.
I have a new homeowners insurance policy. Do I need to send it to you?
Yes, you need to inform Cornerstone of any changes in your insurance policy. You can send your new policy to us online at ihaveinsurance.com/cornerstone . It's quick and easy! Alternatively, you can fax the policy to 833-253-1132, or mail it to the following address:
Cornerstone
ISAOA/ATIMA
PO Box 961254
Fort Worth, TX 76161
My account is escrowed for insurance and I have changed insurance companies. What do I need to do?
Any time you change insurance carriers, you need to take these three steps:
- Provide our Mortgagee Clause to your new insurance carrier to ensure they know where to send billing statements so your premium can be paid on time.
- Cancel your previous policy with your old insurance carrier so that they will not continue to charge you.
- Provide us with your new policy information so we have the details needed to pay your premium. Easily upload your new policy information at ihaveinsurance.com/cornerstone.
Please note: If you have not paid the premium for your new policy and the due date is less than two weeks away, please email evidence of insurance to us at loaninfo@myloanservicer.com and we will expedite payment.
Once I send you my new insurance information, how long will it take to update my account?
It may take up to 14 days for us to verify the information with your new insurance provider and update your account.
When I changed insurance carriers, I paid the premium for the new policy. Will you refund me for the prior policy?
Once you cancel your previous insurance policy, your prior insurance carrier will prorate your refund based on the date you cancelled the policy compared to the coverage period remaining and return any unearned premium directly to you.
I changed insurance carriers, but I have not paid the premium for the new policy. Will you pay the new premium?
Once we receive the billing statement, if you have not paid the premium and your account is escrowed for insurance, we will pay the premium. It may take us up to 14 days to verify the information with the new insurance carrier and pay the premium. If the premium due date is less than two weeks in the future, please email the evidence of insurance directly to Cornerstone at loaninfo@myloanservier.com with attention to Escrow, and we will expedite payment for the new policy.
I changed insurance carriers and received a refund from my prior insurance provider. Can I keep the refund?
It depends. If we paid both premiums from your escrow account within a 12-month period, you will likely have a shortage in your escrow account which you will need to repay. This shortage occurs because we anticipate payment of one premium every 12 months and if we instead pay two premiums during that period, the total disbursements will likely exceed the amount we collected in your monthly payments.
To minimize a potential shortage, you can deposit the funds back into your escrow account any of the following ways:
By mail: Endorse the refund check from the prior insurance carrier and mail the check to Cornerstone at the following address: Attn: Cashiering PO Box 3828 Englewood, CO. 80155. It is important to write "escrow account deposit" on the check.
Online: Deposit the check into your bank account and make a one-time online payment in the amount of the refund. Log into our website or app and go to Payment.
By phone: Deposit the check into your own bank account. Then, make a one-time payment to Cornerstone online or by phone in the amount of the refund, specifying that it should be applied to escrow.
If we did not pay both premiums out of your escrow account or if the new insurance term began at the end of the prior policy’s term, you may keep a refund from the prior insurance carrier with less risk of a future escrow account shortage.
If my new policy costs less than my prior policy, will my escrow payment be reduced?
The change to your insurance premium may result in a change to your monthly payment when our next annual escrow analysis is completed. We review your escrow account at least annually and if your escrow account is projected to have a surplus of $50 or more based on what we expect to pay out of your account for taxes and insurance in the upcoming 12 months, we will return the surplus funds to you in accordance with state requirements.
What is the mortgagee clause?
If you're changing home insurance companies, you'll need to provide our mortgagee clause for your new policy. This lets your insurance provider know where to send premium notices, bills, and claim information/funds.
The mortgagee clause on your insurance policy should be:
Cornerstone
ISAOA/ATIMA
PO Box 961254
Fort Worth, TX 76161
What do I need to do if my home has been damaged?
Here’s what you need to do first:
- Contact your hazard insurance company to file a claim.
- Begin the claims process with Cornerstone: Call 833.253.1133, and we'll let you know what is required for claims funds issued by your insurance company to be disbursed to you.
- From there, you will be able to check the status of your claims disbursement at www.propertyclaimcenter.com. On your first visit, click Create Account to register. Please note, you will need to enter your loan number and email address to complete registration.
I received a check from my insurance company, but the check is made out to both you and me. What do I do?
Once you have begun our claims process, you have completed the necessary documentation, and you receive a check from your insurance company, please take the following steps:
- Each person listed on the check needs to endorse the check with their signature on the back.
- Mail the signed check to us for our endorsement:
Cornerstone
Attn: Property Loss Department
PO Box 29985
Phoenix, AZ 85038-9985
-OR-
Overnight
Cornerstone
Attn: Property Loss Department
7350 N Dobson Rd, Suite 101Scottsdale, AZ 85256
Important: If you will need claims funds expedited back to you, you must enclose (1) a written request with the check and (2) a prepaid shipping label. - We will send claims funds to you:
Variables including the owner of your loan and your loan status will determine the amount of funds disbursed to you and when.
- If the owner of your loan does not permit us to release all funds at the same time, we will endorse the check, the initial funds necessary to begin making repairs will be mailed to you, and any remaining funds will be deposited into your escrow account and held for your future use.
- If permitted by the owner of your loan and you do not have any past-due payments, all claims funds will be mailed to you immediately.
For example, if your loan is owned by Fannie Mae (FNMA) or Freddie Mac (FHLMC) and you are not behind on payments, the first $40,000 will be mailed to you and any remaining funds will be deposited into your escrow account and released as repairs are made. Typically, inspections will be required to verify the completion of repairs before additional funds are released to you.
For information specific to your loan, please contact our Disaster Claims team at 833.253.1133.
I received a check from my insurance provider, am I able to use the funds to pay my loan in full?
You may use insurance proceeds to pay off your loan, but keep in mind, if you choose to do this, you would then own the property “free and clear.” This means you are liable for all activities associated with the property – for example, clearing debris, making repairs, paying taxes, and paying insurance.
I just received a property tax bill and have an escrow account. Do I need to send it to you?
Yes, if you have an escrow account set up for your property taxes and you have received a tax bill, please email a copy to us so we can ensure timely payment.
When will I receive my 1098 statement for tax purposes?
You will receive a statement from us for the time we serviced your account. We send these statements by January 31st each year. If you are enrolled in paperless statements, we'll notify you by email when your statement is ready to view online. Otherwise, we will mail a paper copy to the mailing address you have provided.
What is a tax exemption?
A real estate tax exemption is a reduction (or elimination) of a property tax liability (this is the amount you owe to your local tax authority for a given year). As a homeowner, you can request a property tax exemption from your local taxing authority. The process for requesting a tax exemption and approval timelines vary by taxing authority.
If you have questions about tax exemptions, please contact us. We'll be happy to help!
I have applied for a tax exemption. When will you reduce my escrow payment?
Not all exemption requests are approved, and some are approved at a lesser amount than you anticipate. As a result, we are unable to change the escrow portion of your monthly mortgage payment until we receive confirmation that the exemption was granted and the amount.
In our experience, taxing authorities may take up to 90 days to process exemption requests. If you have questions about the status of your request, you may contact your taxing authority.
My tax exemption request was approved! Now what?
Great news! If you have an escrow account, please email us a copy of the written notification that confirms your tax exemption. We make every effort to proactively monitor your property tax liability to identify new exemptions, however you may be notified that the exemption first.
I was granted a tax exemption. Will I receive a refund for extra funds collected through my previous escrow payments?
We review your escrow account at least annually to help ensure it has enough money to cover your expected tax and/or insurance expenses. Next time we review your escrow account, surplus funds of $50 or more will be returned to you if, at that time, your escrow account has sufficient funds and your mortgage is current (meaning no payments are past due).
I was granted a full tax exemption and received a refund from my escrow account, but the refund was less than I expected. Why?
If our recent annual escrow analysis found a surplus and you received a refund, there are a few possible reasons it was less than expected.
For example, if your escrow account is also set up for other expenses like homeowner’s insurance and/or HOA fees, one or more of these other expenses may have increased.
In addition, a tax refund will be impacted by the effective date of the exemption. If you received a 100% tax exemption effective June 1, 2023, the escrow portion of your monthly payment will be updated at that time. However we may need to retain funds previously collected to in order to cover property taxes due for the period ending May 31, 2023.
Can I remove my escrow account?
Options to remove an escrow account from a loan vary based on factors such as state laws, investor guidelines, loan type, property type and Loan-to-Value (LTV) ratio.
If the loan qualifies, tax payments and homeowners’ insurance premiums may be removed from escrow collection. However, there are certain types of payments that must be escrowed:
- Private Mortgage Insurance (PMI) must be paid through your escrow account.
- Customers who reside in a flood zone and are required to have flood insurance may not be able to waive an escrow account.
What are the requirements to receive an escrow waiver?
Waiver eligibility is dependent on several factors but generally, to qualify for an escrow waiver your loan must be a conventional loan (meaning FNMA/FHLMC) and meet the following requirements:
- Less than or equal to 80% Loan-to-value ratio
- No delinquencies within the past 12 months, and depending on your investor, no 60-day delinquencies within the last 2 years
- No loan modifications
- No defaults on previous escrow waivers – this means if you previously had any escrow collection waived, you paid that item (tax or insurance) in a timely manner
- No escrow disbursements scheduled in the upcoming 45 days
- You cannot have a negative escrow balance
- The loan must be at least 12 months old from the date it was originated.
There may also be state-specific laws regarding when and how escrow waivers can be granted, so additional requirements may apply. Please contact us to confirm your loan's eligibility.
Is there a fee to waive my escrow account?
There is a one-time processing fee of 0.25% of the unpaid Principal Balance. If we confirm your loan meets all requirements, you will be mailed a letter specifying the calculated fee and how to make the payment by phone, electronically, or by mail.
What is the timeline to remove my escrow account?
It will take us five business days to evaluate your loan and confirm eligibility. You will then be mailed a decisioning letter. If you want to proceed, within 30 days of receiving the required fee, we will remove the escrow collection and mail you a letter confirming completion.