Can My Lender Raise My Mortgage Payment?

Can a lender who bought out my original mortgage company after only 6 months review my loan and raise my monthly payment by $409,00? { supposedly for impound acct reserve)

1 Answer

The terms of your mortgage as specified in the Note cannot change ever, whether it is with your current lender or a new lender who has been transferred the servicing rights.

In your particular case, it is not technically the monthly mortgage payment (defined as the Principal & Interest payment) that has changed, but rather the monthly amount collected to pay your escrows (typically homeowner's insurance and property taxes). Possible reasons why the the new servicer is increasing your monthly payment is that the initial escrow analysis done by your former lender was done incorrectly leading to a shortage or your property taxes and/or homeowner's insurance have significantly increased recently.  There is also always the possibility that the new servicer has made a mistake in their escrow analysis.

If you believe the new servicer has made error in calculating the proper escrow amount, Section 6 of RESPA provides that you may make a "qualified written request" which the lender must acknowledge within 20 days and resolve the complaint within 60 days by correcting the mistake or giving a statement for the reasons for its position.

Escrow accounts are regulated under Section 10 of the Real Estate Settlement Procedures Act (RESPA) which was established to provide protections for consumers.  Specific escrow acounts regulations are published in HUD's RESPA Final Rule which are detailed in Title 24 of the Code of Federal Regulations, Part 3500.17 (

In Section 3500.15(f), Transfer of Servicing, it states that if the new servicer changes the monthly payment amount that they are required to provide you an initial escrow account statement within 60 days of the date of the servicing transfer.  There is no prohibition of the new servicer changing the amount collected escrows although they are bound by the calculations specified in the regulations.