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Insurance, Escrows and Property Taxes

Cha-ching! Time to ring the register because I’m paying out big time. So the first month of not living in my house (but not paying any portion of my taxes, HOA, etc) was uneventful. The second month happens to coincide with when Howard County and Columbia Association assesses their taxes for the coming year and when coupled with my inexperience makes for an interesting experience. The property tax bill I’m facing is about $2100 a year plus Columbia (CPRA) fee of a little under $500. Insurance should’ve been paid for by my closing agent (Crown Title) but I received a notice of non-payment so unless I get it sorted out by July 27th, I’ll have no insurance (which unlike auto insurance, isn’t a legal problem but more of a peace of mind problem).

Well, first things first, BB&T (1st mortgage lender) will handle all of the taxes because I opted for the escrow. Even if my escrow is short, BB&T will cover it for me and simply readjust their collections to reflect the extra they’ve paid out. Why did I opt in the escrow instead of playing the float? There are four reasons for this:
1) All earnings are out the window if I mess up and miss a payment. (unlikely but dangerous)
2) I’m screwed if I don’t show discipline in saving the money. (unlikely but dangerous)
3) BB&T’s escrow account is interest bearing. (I didn’t know this in making the decision though)
4) We’re talking fewer than 3% (after taxes) on perhaps around $3,000 in the escrow – or $90.

All the money collected at closing for insurance and taxes went into an escrow account with Equitable Trust. When the first mortgage was sold, all of that was sent to BB&T because they were not servicing the loan. The only difference between insurance and taxes was that the insurance was immediately paid out, between closing and when the 1st mortgage was sold to BB&T.

The insurance is the bigger issue. I gave the title company a call since they should’ve sent the payment to Traveler’s at closing (they collected it so I want to know where my cash is) – it allegedly never hits the escrow account at all the first time through. I had to leave a message with the person I believe is the closing agent so we’ll what happens. The bill is small enough that I could pay it off just to ensure I am insured and if Traveler’s is double-paid, they can return the balance to me. I’ll keep you all posted.

I’m need of some advice as to whether this is common or if I’m going about this the wrong, any and all advice/criticisms are appreciated. Thanks!