How to Cancel an Escrow Account Without Fees
Banks prefer customers maintain their escrow accounts. An active escrow account allows the bank to control the payment of taxes and insurance, assuring that the borrower remains current. While a bank may not be able to stop you from closing your escrow account, it may charge you a fee to do so. You must be aware of this fee up-front to negotiate its cancellation. Be aware, too, that you may need compensating factors such as a long-standing relationship with the bank if you hope to closeout an escrow account without incurring fees.
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Instructions
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Review your loan documentation, specifically the "Escrow Agreement." Look for the requirements to cancel your escrow account and whether there is an escrow cancellation fee.
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Contact your lender and inform a representative that you wish to cancel your escrow account. Tell her you are requesting that the fee be waived. If the representative can't authorize the fee waiver, ask to speak to someone who has the appropriate authority.
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Speak to the manager or designated contact and present him with factors that compensate for the fee waiver. These factors include a long relationship with the lender, a significant deposit relationship or a unblemished repayment history. Note the names and titles of the people you speak with.
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Submit a formal request to cancel your escrow account in writing. Include a statement that you spoke to a bank representative who agreed to waive the fee. Include the person's name and title in the communication.
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