Removing Your Escrow Account
Having an escrow account is all about convenience. It means that you never have to worry about when property tax and insurance bills are due because we make the payments for you.
On the flip side, removing your escrow account means that we will no longer make payments for your property taxes or insurance, and therefore, will no longer collect the escrow portion of your monthly payment.
Benefits & Drawbacks
Benefits of Removing Escrow:
- It keeps money in your account to possibly accrue interest.
- You are in control and know what is being paid and when.
- You have more flexibility with insurance carrier changes. (They must still meet our requirements, including an A rating from A.M. Best.)
Drawbacks of Removing Escrow:
- It may be a hassle to budget for large, lump-sum property tax and insurance bills.
- If payments are late or missed, you will be responsible for any penalties or fees.
Note: This is not related to mortgage insurance (PMI/MIP).
Requirements & Guidelines
The eligibility for removing escrow is loan-specific, and can vary by state, so the best way to determine eligibility is to contact us. However, here are some general rules that may apply:
- The loan cannot have had escrow force-placed in the past.
- The loan cannot be an FHA loan.
- If the loan has been modified where escrow is a requirement, it cannot be removed.
- The loan-to-value (LTV) ratio must be 80% or less.
- Flood insurance cannot be removed in certain cases when coverage is required.
- The escrow account must have a positive balance (no escrow advances that haven’t been repaid).
Requesting Escrow Removal
To see if your loan is eligible for removing escrow, contact us via:
- Message Center: Select the envelope icon in the upper-left corner, once you are signed in.
- Email: ResearchIncoming@mrcooper.com
- Mail:
Mr. Cooper
PO Box 612488
Dallas, TX 75261 - Fax: 972-459-1611
- Phone: 833-685-2565
Note: This process can take up to 15 business days.
Next Steps:
- We’ll send you a letter that advises if you are eligible for escrow removal.
- If approved, we’ll remove the escrow account and send you a final letter with your new monthly payment amount.
- We’ll also let you know if you have an escrow refund headed your way.
Note: You must advise your insurance company that you will be making the payments directly to them going forward.
- You’ll still need to notify us of any insurance changes and provide the mortgagee clause to your insurance company.
For more considerations on escrow removal, see our blog “How To Remove an Escrow Account From Your Mortgage: Pros & Cons.”
Adding Back Escrow
If you change your mind, it’s important to know that it takes about 30 calendar days to open an escrow account again, depending on how soon you sign and return the agreement. Therefore, you’ll want to pay any property taxes or insurance premiums due within the next 60 days to ensure nothing is missed.
Note: You are responsible for paying all escrow items until the escrow account is re-established.
Here’s how to add an escrow account.
