Mortgage Loan Servicing FAQs - General

 

Why did my payment change?
Your payment could have changed because of one of two things. The first is that your loan could be an adjustable rate mortgage (ARM) wherein your interest rate changes every 6 to 12 months. Please refer to your Adjustable Rate Rider for more information on your loan.

The second reason for your payment change is related to your escrow account. The escrow account was set up to pay your taxes, insurance and/or mortgage insurance premiums. In compliance with the Real Estate Settlement Procedures Act (RESPA), you will receive an annual escrow analysis statement, which shows the adjustment to your escrow payment based on current insurance and tax premiums. As your premiums increase from year to year, your escrow payment must be adjusted accordingly to ensure that we are collecting a sufficient amount to pay these items for you.

For additional information please contact us at 1-800-366-7621.
To top

What is an escrow account?
An escrow account is set up at the time of closing for the purpose of paying future hazard insurance, property tax and mortgage insurance premiums each year. As part of your monthly mortgage payment, 1/12 of your combined premiums are collected for deposit into this account until we pay the premium on your behalf.
To top

Are lenders limited in the amount of escrow they can collect from borrowers?
The Real Estate Settlement Procedures Act (RESPA) sets limits on the amount which can be collected to pay for escrow items, and it places a cap on the amount of the reserve that servicers may require borrowers to pay to cover unanticipated increases in their premiums. Charter is in compliance with this requirement.
To top

What is the reserve amount?
We hold up to a two-month reserve in your escrow account to help cover any increases in your premiums. We limit the reserve to what is allowable as set forth in the Real Estate Settlement Procedures Act (RESPA).
To top

How are escrow shortages or overages handled?
We are required by the Real Estate Settlement Procedures Act (RESPA) to annually analyze each of our borrowers' escrow accounts to 1) ensure that we are collecting enough escrow, 2) to identify any escrow overage situations, and 3) to determine if an escrow shortage exists.

If a shortage exists, we take 1/12 of the shortage amount and collect that amount over the next 12 months. This helps our borrower for budgeting reasons because the shortage is spread through the year rather than collected as a lump sum. Our borrowers are given the choice to pay the lump sum and forego the 12 month spread if they choose.

If an overage exists and it is under $50.00, we take 1/12 of the overage amount and reduce the monthly escrow payment by that amount. If the overage is $50.00 or more, a refund check is mailed to the borrower within 30 days of running the annual analysis.
To top

What do I need to do if I receive a tax billing?
Charter Bank will obtain the information needed to pay your property taxes. Keep the tax bill for your information.
To top

What do I need to do when I receive the renewal notice from my insurance company?
Review the notice to make sure that you have the coverage amounts that you need and to make sure that Charter Bank is listed as mortgagee. If we are listed as mortgagee, we will receive a copy of the renewal notice. If we are not listed as mortgagee, please notify your agent to list Charter Bank as mortgagee and have them forward a copy to us. We will review the policy to make sure that it meets our requirements. We will pay the premium 22 days prior to the due date of the premium.
To top

Can I change my insurance company at any time?

Yes, you can. If you change your insurance company on the renewal date of your current policy, these are the steps you need to take:

  1. Notify Charter Bank at least 23 days prior to the renewal date.
  2. Send Charter Bank an authorization form, allowing us to accept and pay the new insurance policy. You may do this through our online Change of Hazard/Flood Insurance Company Authorization Form.
  3. Have your agent send us the new insurance policy and bill.
  4. Notify your previous insurance company that you are canceling their policy.

Once we have received all of the above, we will update our system to reflect the new insurance company and prepare the payment to be paid from your escrow account.

If you are changing insurance companies on any date other than your renewal date, these are the steps you need to take:

  1. You will be responsible for the first year premium that will be due on the new policy.
  2. There will be a $15.00 mid-term change fee due to Charter Bank with your next mortgage payment.
  3. Provide Charter with an authorization form allowing us to accept the new insurance policy. You may do this through our online Change of Hazard/Flood Insurance Company Authorization Form.
  4. Have your agent provide Charter with the new policy and paid receipt.
  5. Notify your previous insurance company that you are canceling their policy. Request that they send the refund of any unused portion of the premium, if applicable, to you.

Once we have received all of the above, we will update our system to reflect the new insurance company. We will begin paying the premium for your new insurance company at next year's annual renewal.
To top

What must I do if I have property damage?

You need to contact your insurance company/agent immediately. Please notify Charter Bank of the damage. Depending on the type and amount of damage, we may need to have an inspection done on the property.
To top

What is Private Mortgage Insurance (PMI) and can it be cancelled?

If your mortgage loan has private mortgage insurance (PMI), the premiums may be included in your monthly mortgage payments. PMI insurance reduces Charter Bank's risk in the event of default, and is different from the hazard insurance required under the terms of the mortgage.

Conditions of Cancellation
Monthly PMI premiums may be cancelled under very specific conditions. These conditions can include:

Please contact us to obtain the specific requirements on your loan.

Restrictions for Cancellation
Cancellation of PMI is subject to certain restrictions including but not limited to:

Can my mortgage payment be drafted from my checking or savings account?

We offer an automated pre-authorized payment program. This service will automatically draft your monthly payment from your bank account, saving you the expense of monthly postage and possible late fees. The draft is typically debited from your bank account on a preset day each month. Click here for our online SWIFT Transfer Agreement Form
To top

What are the different options available to make my payment each month?

We offer four option plans:

  1. Make your payment each month using your payment coupon and mailing this payment to our post office box to ensure receipt prior to the late charge date; please note that we do not consider the postmark date in determining if the payment is late. Our mailing address for payments only is:
    Charter Bank
    P.O. Box 11219
    Albuquerque, NM 87192-0219
  2. Use our free automated pre-authorized payment program. This service will automatically draft your monthly payment from your bank account, saving you the expense of monthly postage and possible late fees. The draft is typically debited from your bank account on a preset day each month. Click here for our online SWIFT Transfer Agreement Form.
  3. Use our Pay-by-Phone program. You can call our automated system at 1-800-366-7621. There is a $10 fee for this service if you process your draft using the automated system. If you opt out of the automated system and have a Customer Service Representative process the draft for you, the fee is $15.
  4. Use our online Access Now program that enables you to make your payment any time. There is a $10 fee for this service.

To top

Can I pay my mortgage payment with a credit card?

Charter, like most lenders, does not allow mortgage payments to be charged to a credit card.
To top

When is my payment considered late?

Your payment is due in our office on or before the first day of the month. It is considered late the following day.
To top

Do I have a grace period?

The time between the due date and the assessment of a late charge is normally 15 days. It is not a grace period for delaying the making of your monthly payment. It is a convenience to allow for such things as mail delays, weekends and holidays.
To top

What if my payment is postmarked before the delinquent date?

The date we receive your payment is the date we use to determine whether a late charge is assessed. We do not consider the postmark date.
To top

Can I make extra principal payments so I can pay off my loan earlier than maturity?

Depending on the type of loan you have it may be feasible for you to make extra principal payments against your outstanding principal balance. Extra principal payments will have an effect on the amortization schedule over the remaining term of your loan, which means you will pay less interest.
To top

How is interest calculated on my mortgage loan?

Most mortgages calculate interest in arrears, unlike other loans that calculate interest to the date of payment receipt. As an example, when borrowers pay their January mortgage payment, they are paying the December interest. This method of calculating interest is based on a 360-day year in which each month has 30 days; these are frequently found on FHA loans. Some loans are calculated based on a 365-day year in which some months have 31 days; these are frequently found on Conventional and VA loans.
To top

Is my mortgage interest tax deductible?

Interest on a mortgage is usually tax deductible. You should consult a tax attorney, tax preparer or the IRS for specific information regarding the deductibility.
To top

 

The information contained in this FAQ is intended only as a guideline. Please contact us if you need more information relating to your mortgage loan.

Apply Online

Mortgage Servicing Forms

Knowledge Center

Tools to put you in charge of your financial future