Steps to Review and Dispute an Aggregate Escrow Adjustment

Steps to Review and Dispute an Aggregate Escrow Adjustment

An aggregate escrow adjustment (AEA) is an annual reconciliation lenders perform to ensure your escrow account has enough funds to pay property taxes, homeowners insurance, and other escrowed items. If the reconciliation shows a shortage or overage, the lender issues an AEA to adjust monthly payments or return funds. Below are clear, step-by-step actions to review the AEA and dispute it if needed.

1. Gather your documents

• Escrow analysis statement: the lender’s AEA notice with calculations.
• Loan agreement and escrow account disclosures: to confirm permitted charges and cushion limits.
• Property tax bills and insurance invoices: for the period covered by the AEA.
• Account statements: monthly mortgage/escrow statements showing deposits and disbursements.

2. Verify the period covered and key figures

• Check dates: confirm the 12-month period the analysis covers.
• Compare balances: starting escrow balance, payments into escrow, disbursements paid (taxes, insurance), and ending balance.
• Note the shortage/overage amount and any cushion the lender applied (typically up to 2 months’ escrow payments).

3. Recreate the lender’s math

• Add all escrow payments you made over the period.
• Add all escrow disbursements the lender claims to have paid (match against tax and insurance bills).
• Compute expected ending balance: starting balance + payments in − disbursements.
• Compare your result with the lender’s ending balance and shortage/overage.

4. Check for common errors

• Timing mismatches: payments posted late or credited in a different month.
• Duplicate or missing disbursements: lender shows a payment you already paid or missed a bill.
• Incorrect tax or insurance amounts: verify amounts with taxing authority and insurer.
• Wrong starting balance: prior adjustments or refunds not reflected.
• Cushion miscalculation: lender charged more than allowed by your loan documents.

5. Document discrepancies precisely

• Create a concise list: for each discrepancy, note the line item, the lender’s amount, your amount, the source document (tax bill, insurer invoice, bank statement), and the difference.

6. Contact your servicer — initial outreach

• Call first to ask for clarification and request an itemized ledger and copies of invoices/receipts for disbursements.
• Take notes: date, time, representative name, and summary of the conversation.

7. Submit a written dispute

• Format: short cover letter plus supporting documents.
• Include: loan number, account holder name, clear statement of dispute (e.g., “I dispute the disbursement of \(X on DATE for Y — see attached invoice showing \)Z”), copies of supporting documents, and a request for a corrected escrow analysis.
• Send via certified mail or the servicer’s secure message center; keep proof of delivery.

8. Escalate if necessary

• If the servicer’s response is delayed or unsatisfactory:
  • Request a supervisor or the servicer’s escrow department review.
  • File a complaint with the Consumer Financial Protection Bureau (CFPB) or your state banking regulator — include your written dispute and servicer responses.
  • Consider legal advice if the amount is large or errors persist.

9. Track outcomes and ensure correction

• Obtain a corrected escrow statement if the servicer agrees an error occurred.
• Confirm repayment or refund terms: if shortage reduced or eliminated, confirm how monthly payments will change or whether a refund is issued.
• Monitor subsequent statements for accurate implementation.

10. Prevent future issues

• Keep copies of tax and insurance bills and all mortgage statements.
• Make escrow payments on time and confirm they are credited properly.
• Review annual escrow analyses promptly and repeat this process each year.

If you’d like, I can draft a dispute letter template you can personalize and send to your servicer.