Escrow Analysis FAQs

The annual escrow analysis is done in February each year, with statements mailed to you, the borrower, shortly
thereafter. Any payment changes will take effect with your May mortgage payment.

That information is not provided to Embers. Please contact your local tax office or insurance agent for
further assistance.

An escrow cushion is an additional balance ensuring that there is enough money in your escrow to cover expenses for the property. This is the lowest that your escrow balance should ever fall, assuming no unexpected increases or additional payments occur during the year.

The surplus will be deposited to your savings share if the surplus is $50.00 or greater. If not, it will remain in escrow.

The automatic payments will be adjusted by Embers Credit Union as follows:

1. If your automatic payments exactly match the amount due, your automatic payment will adjust to match your new monthly payment.

2. If your automatic payment includes extra principal and your new payment is less than the current automatic
payment amount, your automatic payment will not be adjusted and remain the same decreasing the amount of
extra principal.

3. If your automatic payment includes extra principal and your new payment is greater than the current automatic
payment amount, your automatic payment will be increased to match your new monthly payment with no extra
principal.

4. If any of the above automatic payments involve ACH payments from another financial institution, the ACH
transfer will be adjusted to match the new automatic payment.

An increase or decrease in the escrow portion of your payment may be the result of an increase or decrease in your property taxes and/or insurance premium. This may also result in an escrow shortage or surplus. The analysis is done so that your escrow payment reflects the most recent tax and/or insurance amounts for the 12 months prior to the analysis being run.

Nothing needs to be done with the shortage/deficiency if you choose. As shown on the last page of the statement, the
escrow shortage/deficiency will be spread over 12 months with 1/12th of the shortage/deficiency being added to the
new monthly payment. You may also choose to pay the shortage/deficiency. This will eliminate the extra 1/12th shortage/deficiency each month and your payment will be adjusted to the lower payment amount. In either case, your payment will change to a new payment amount based on the analysis.

A surplus is the portion of the projected escrow balance that is greater than the cushion amount. A shortage is the amount by which the escrow balance falls short of the cushion amount and there isn’t enough to pay the estimated tax and insurance for the future. A deficiency is the amount by which the balance goes below zero and funds have been advanced to cover disbursements on your behalf. When there is a deficiency, there will also be a shortage.