Homeowner Education
How to Read Your Annual Escrow Analysis, Shortage Spread & IRS Form 1098
Quick Answer (BLUF): Once a year, your mortgage servicer audits your escrow account against updated county property tax bills and homeowner insurance renewals. Under federal RESPA rules, servicers may hold a maximum 2-month cushion and must let you spread any escrow shortage over 12 months.
Visual Cost & Payment Breakdown · Mortgage Statement & Escrow Guide
Statement answer
Your monthly mortgage statement shows the amount due, how the last payment was applied, fees and the balance. If something looks wrong, gather proof, call the servicer, and if needed send a written notice of error or request for information, which carry federal response deadlines.
Last reviewed against the primary sources listed below.
ToolIssue finderMatch the problem.GuideReading the statementReading the statement.GuideEscrow analysisEscrow analysis.GuidePayment not creditedPayment not credited.GuideNotice of errorSending a notice of error.GuideRequesting informationRequesting information.GuideThe year-end 1098The year-end 1098.New guideKeeping statementsWhich mortgage records to keep, for how long, and why.New guideHow statements arriveWhen servicers must send periodic statements and the options for paper.GlossaryKey termsPlain definitions with sources.GuideLate feesHow late fees work, where they appear on the statement and how to ques.GuidePartial paymentsHow servicers handle payments smaller than the full amount due.PrintableLender questionsQuestions to bring to any lender, ready to print.
Your rights
The CFPB servicer guide explains what servicers must do.