INB Addresses Escalating Escrow Payments Due to Increased Insurance and Property Taxes

SPRINGFIELD, Ill., Oct. 25, 2024 /PRNewswire/ -- INB, N.A., a locally owned bank and leading Central Illinois provider of escrow services to mortgage customers, is addressing rising concerns over increased mortgage payments stemming from higher homeowner insurance premiums and property taxes. As these costs continue to climb, customers are experiencing significant impacts on their monthly payments, prompting an increase in inquiries to INB's mortgage operations.
"Our customers are understandably upset," said Steven Day, AVP, Loan Servicing Manager at INB. "We've seen instances where mortgage payments have increased by as much as $939 a month. It can be a substantial burden for many homeowners."

Day highlighted that these rising costs are affecting everyone, leaving limited options for customers seeking relief. INB advises homeowners to explore alternatives such as shopping for a different insurance carrier or appealing their property tax assessments with their local county. However, either option might not change things. Homeowner insurance rates in Illinois have increased 20 to 30% in the last 12 months, and tax appeals often provide disappointing results.

Day notes that while some individuals might drop their escrow accounts in response to these hikes, it's crucial for homeowners to plan for their tax and insurance payments to avoid financial strain.

"An escrow account remains a practical way to manage these payments by saving incrementally over time," Day said. "We are strong proponents of escrow because it helps ensure these expenses are covered."

Mortgage Operations support staff report that 75% of their calls are now related to escrow, a significant jump from previous levels. Customers often express frustration over the increased costs, with customers even being brought to tears. Loan officers (LOs) at INB are working closely with customers to explore all available options, says Day, including spreading shortages over multiple years. But Day cautions: "This approach only extends the repayment period rather than reducing the overall burden."

In some cases, homeowners have managed to offset the increase by dropping Private Mortgage Insurance (PMI). They're able to do this because, as most new appraisals show, home values are increasing. Once a customer has 20% equity in a home, they are no longer required to carry PMI. The average cost of PMI insurance is 0.46 to 1.5 percent of the loan amount, according to the Urban Institute.

"We provide services to over 6,000 mortgage loans, and our goal is to support our customers through these challenging times," Day emphasizes. "It's important to remember that while there may be some options to explore, it's important to have adequate insurance coverage and plan for property tax payments."

INB encourages all customers to stay informed and reach out to their mortgage lenders for guidance and support in navigating changes.

About INB
About INB, N.A. – INB is a privately owned national bank. Founded in 1999 in Springfield, IL, the bank offers both personal and commercial banking products and wealth services in Central Illinois. The bank also provides commercial banking services in Missouri and Florida. INB is a trusted provider of escrow services, supporting over 6,000 mortgage loans.

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SOURCE INB, N.A.