Yesterday, August 29th, Jim Strickland of WSB-TV presented a news story about a taxpayer who said that her mortgage company stated they were raising her escrow amount to accommodate a request by the Tax Commissioner’s Office for one installment in this current tax year. In the story, Ms. Davis, the taxpayer, expressed her concerns about not receiving a notice of change in the installment payment process from our office. Also in the story, Mr. Strickland closed by stating that the Tax Commissioner’s website had not been updated to remove the statement regarding the request that mortgage companies and tax services pay in one installment by the first deadline date of September 30th.
To be clear, the Tax Commissioner’s Office is taking installment payments now, have been since the bills were mailed and will be in the future. No one has been turned away. No individual, mortgage company or tax service has been denied the ability to pay property taxes in two installments. Additionally, the Tax Commissioner website was updated to remove any confusion regarding our request for mortgage companies and tax services to pay in one installment.
While Ms. Davis did contact our office about her concerns, she did not receive a notice because we did not know her mortgage company was changing her escrow amount. Nor should we know.
And the rest of the story is…
Mortgage companies and tax services have for decades been the primary payers of property taxes for most homeowners in DeKalb County and throughout this nation. It is not unusual. The escrow accounts of homeowners are strictly controlled and managed by mortgage companies. Escrow contracts are between a borrower and lender and are a contingency required by the lender to insure that taxes and insurance are paid timely. The Tax Commissioners Office is not part of that process and does not influence the amount of escrow at any time (other than providing timely and accurate information).
Within the DeKalb County Tax Commissioner’s Office and that of most other Tax Commissioner’s Offices, mortgage companies or tax services receive a data file that identifies property details for making the proper tax payments, both first and/or second installments, according to the due dates. That has not changed.
Many companies have elected to use the option to fully pay the taxes by the first installment for several reasons. First, it eliminates the need to re-calculate escrow accounts after payments are made. It also makes it easier to account for escrow balances in large volume operations. Additionally, it eliminates adjustments to taxes based on changes that may occur in the ownership status of properties in the forty-five days between installments. The process is an efficiency advantage to lenders, the taxpayers and the tax payment process. The efficiency gained by this one single simplification in a normally internal or backend process far outweighs the cost of not retaining escrow for an additional forty-five days. Everybody wins!