WHEN you choose a fixed-rate loan for a home purchase or refinancing — as more than 9 out of 10 people currently do — only one part of the monthly mortgage statement is ever likely to change: the escrow amount.  But with home values sinking, and many people filing property-tax challenges as a result, the monthly escrow could possibly decline a bit.  The escrow amount, which is added to the principal and interest of the monthly mortgage payment, is typically adjusted annually, and often in December or January, as lenders review for overages or shortages. Some lenders review the escrow account on the anniversary of the mortgage closing.  Escrow collection is set up before a mortgage closing and based on property-tax bills and the homeowners’ insurance, including lender-required polices like flood coverage, according to Peter Graubard, a real estate lawyer in Manhattan who often represents Wells Fargo and other banks at home closings.  Homeowners would do well, however, to assess their own escrow statements, industry experts say, as mistakes may sometimes occur.  There can be errors from the start, especially if the property is in an area with several taxing authorities and one of them is overlooked, said Michael G. Barone, a real estate lawyer at Abrams Garfinkel Margolis Bergson in Manhattan. “They’re only escrowing for two of the three taxes owed,” he said.  Other mistakes may be made later on: the lender or mortgage servicer may have missed a tax payment or allowed the balance to grow beyond limits allowed under the Real Estate Settlement Procedures Act. The federal law allows lenders to keep a cushion of up to two months’ total escrow payments.  One way to avoid any problems is to pay your homeowners’ insurance and property taxes yourself. Mr. Graubard says borrowers can request to do so before the mortgage closing or by contacting the customer service department of a lender or servicer.  Some lenders charge a one-time fee to forgo an escrow, typically around a quarter of a percentage point of the loan balance, or $500 on a $200,000 mortgage, according to Jeff Lipes, a senior vice president of Family Choice Mortgage in South Windsor, Conn., and the president of the Connecticut Mortgage Bankers Association.  Many homeowners, meanwhile, are filing property-tax grievances to reduce their assessed valuation and tax payments, since many towns and municipalities only reassess properties every five to seven years. (Appeals are generally due from March through May.)  Glenn Newman, the president of the New York City Tax Commission, said there had been steady growth in the number of successful residential tax appeals, partly because of declining property values. In 2011, approximately 3,888 condominiums, co-ops and rental buildings accepted offers of tax reductions totaling $1.95 billion; in 2010, there were 2,526 acceptances and reductions totaling $982 million. (These numbers include appeals from unit owners as well as building boards and management.)  Even if your home’s value has decreased, however, your taxes may not fall, because some cities and towns are raising millage rates, or the rate at which property taxes are calculated, to preserve local services.  After a successful appeal, your lender may continue with the same escrow arrangement — at least until the next tax bill arrives, and possibly until the annual review. “You could be paying more money into the escrow account than you need to pay,” Mr. Graubard said.  If you want the amount to be decreased based on newly reduced taxes, go to the lender or servicer’s customer service department and make the request, presenting documentation of the lower taxes. “It’s up to the homeowner to get the information to the bank,” Mr. Barone added.
Success in challenging property taxes means not having to put as much money aside in the escrow account.