Understanding Escrow Shortages: Here’s What You Need to Know An escrow shortage happens when your mortgage company pays your property taxes or homeowners insurance, and the cost is higher than what was collected in your monthly escrow payments. This creates a “shortage” because they’ve paid more on your behalf than what was available in your escrow account. To address this, the mortgage company will: 1️⃣ Require you to pay back the shortage (the amount they’ve already covered). 2️⃣ Adjust your f
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