With a traditional mortgage, the county and your insurer send bills straight to the lender. With seller financing, nobody sends them to your escrow company. Here's why, and the easy habits that keep your taxes and insurance paid on time.
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The frustration is understandable
If you've owned a home with a traditional mortgage, you probably never thought twice about your property tax bill. The county sent it straight to your lender. Your lender paid it from your impound account. You saw a line item on your monthly statement, and that was the end of it.
Now you've bought a home through seller financing, through a Real Estate Contract, a mortgage held by a private seller, or another owner-financed arrangement, and your escrow company is asking you to send in a copy of your property tax bill when it arrives. And your insurance bill. Every year.
This feels backward. Didn't you set up an impound account so you wouldn't have to think about this? Isn't that what you're paying for?
The frustration is understandable. The reason behind it is simple, and once it clicks, the whole system makes a lot more sense.
The difference between a mortgage company and an escrow company
With a traditional mortgage, the lender holds a mortgage lien against the property. For many public records, including tax bills and insurance notices, the lender is treated as having an ownership interest. The county tax assessor knows the lender exists because the mortgage was recorded at closing. The insurance company knows because the lender is listed as a loss payee on the policy. Both automatically send copies of bills and notices to the lender, because the lender has a recorded interest in making sure those bills get paid.
The lender wants that information because an unpaid tax bill can turn into a tax lien that takes priority over their mortgage, and an uninsured property that burns down is a loss they can't recover. Their interest in getting these bills is self-protective, and the system supports it automatically.
A long-term escrow company like Sunwest is fundamentally different. We are not a lender. We hold no lien against your property. We have no ownership interest. We are a neutral third party, required by New Mexico law (NMSA 58-22) to stay neutral between the buyer and the seller and to follow only the instructions in your Real Estate Contract.
Because we don't own anything and don't have a recorded interest in your property, the county assessor doesn't know we exist. The insurance company doesn't know we exist. Nobody sends us your bills automatically. We don't have a system that quietly pulls your tax information from the county in the background, and we couldn't set one up even if we wanted to, because we have no legal standing to request it.
The only way we know what your tax bill is each year is if you send it to us. The only way we know your insurance premium is if you send it to us. That's not a limitation of our service. It's a feature of the neutrality that protects you.
Why it matters: we can't guess
Some clients ask a reasonable question: "Why can't you just estimate my tax bill and pay the county what you think I owe?"
We can't, and we shouldn't, for several reasons.
Tax bills change every year. Your assessed value changes. Mill levies change. Exemptions change: the head of household exemption, the veterans' exemption, the over-65 freeze on valuation increases. Special assessments get added and removed. A bill that was $1,800 last year might be $2,150 this year, or $1,620. If we guessed, we'd be wrong, and either way the consequences land on you. Pay too little and you'd owe a balance. Pay too much and your impound account would be drained beyond what the contract allows.
Insurance premiums change too. Your rate might go up because of a regional claims trend, or because you added a trampoline to the backyard. It might go down because you put on a new roof or bundled policies. Your carrier might change entirely. If we paid last year's amount to last year's carrier, we might be paying the wrong company the wrong amount for a policy that no longer exists.
We don't have the right to request these documents. New Mexico law doesn't give neutral escrow companies the standing a lender has. We can't call the county and have them send us a copy. We can't contact your insurance carrier for documentation. Those relationships belong to you.
You are the owner, in every practical sense. Under New Mexico case law, the buyer on a Real Estate Contract is considered the practical owner from the day of closing. You get the mortgage interest deduction. You get the homestead exemption if you live there. You choose the insurance carrier. You decide whether to challenge an assessment. You have the rights of ownership, and with them comes the responsibility to manage your own bills.
This is a protective design. If a neutral escrow company could pay bills in your name without seeing documentation from you, it would open the door to fraud, mistakes and losing control of your own property. The system keeps you informed about your own obligations, which is almost always a good thing.
What happens if you don't send us the bills
Here's the most common scenario.
Your property tax bill arrives at the house in November. You glance at it, remember you have impounds set up with Sunwest, and assume we're handling it. You file it away.
December comes and goes. We don't pay the bill, because we never saw it. The county's December 10 deadline passes.
In January, the county starts charging interest and penalties on top of what you already owed.
By spring, the delinquency is substantial. If it continues, the county can start a tax lien process against the property. Under New Mexico law, that process can end in a tax sale, and you could lose a property you've been paying on for years.
Meanwhile, your impound account at Sunwest has money in it. The funds are there. They're just waiting for the bill.
All of this is avoidable with a single email, a photo of the bill sent to your account manager, or an upload through our online portal.
Insurance works the same way, and the stakes can be higher
Insurance notices follow the same pattern. Your carrier sends you the annual premium notice. If you don't forward it to us, we don't know what to pay, when, or to whom.
If the premium goes unpaid and the policy lapses, your property is uninsured. If something happens during that window, a kitchen fire, wind damage, theft or a burst pipe, the loss is yours alone.
Your Real Estate Contract almost certainly requires you to keep the property insured. A lapsed policy is often a breach of contract, and depending on the contract's terms, it can give the seller grounds to issue a default notice.
Again, this is all preventable. Forward the bill to us when it arrives. We pay it from your impound account. The policy stays current, and everyone is protected.
How to make this easy on yourself
These habits solve it for good:
- Set a yearly calendar reminder. New Mexico property tax bills arrive on a predictable schedule, generally in the fall, with the first half due by December 10 and the second half by May 10. Put a reminder in your calendar for October: "Watch for property tax bill." When it arrives, forward it to Sunwest right away.
- Change your mailing addresses, but only if you want to. Some clients have their tax and insurance bills sent straight to Sunwest by updating the mailing address with the county assessor and their insurance carrier. You stay the owner of record; only the mail delivery changes. Not every client wants this, because you stop seeing the bills yourself. If you prefer a hands-off approach it's an option, just know you're giving up a layer of visibility.
- Use the online portal. Our NoteServe portal lets you upload documents to your account from any device. Take a photo of your tax bill with your phone, upload it, and you're done. No calling, no mailing, no printing. The document goes straight into your account record and your account manager is notified.
- Forward by email. If uploading isn't convenient, email a scan or photo to your account manager, with your account number if you can. We'll confirm we received it and pay the bill from your impound account.
- Check the payment afterward. You can log into the portal any time to see when a bill was paid, how much, and to whom. If something looks wrong, call us right away.
The bigger point: impounds are a service, not an automation
Your impound account is genuinely valuable. It turns big annual bills into small monthly contributions you barely notice. It makes sure the money is already there when the tax bill arrives. It protects you from a $2,000 bill landing in a month you weren't expecting it.
But it needs your participation. We hold the funds. We make the payment. You give us the bill. Each of us has a role, and the system only works if each of us does ours.
Think of it this way: we're not the lender watching over your shoulder. We're a neutral partner helping you manage your own finances more smoothly than you could alone, and that works when information flows both ways.
One last thing
Clients coming from traditional mortgages sometimes feel at first that this system is less sophisticated than what they're used to. We'd argue it's more respectful of their position. With seller financing, you're the owner in every meaningful sense, including knowing what you owe and when. We're here to help you carry it out, not to replace you as the decision-maker on your own property.
Once this clicks, most clients prefer it. You stay informed about your own assessments, insurance coverage and finances. You catch mistakes the county or insurance carrier makes, because you see the bills. You keep control.
And with a quick forward or upload once or twice a year, you get all the benefits of an impound account without giving up any of the oversight.
Questions about how your account works, or the easiest way to send us your bills? Call us. That's what we're here for.
Sunwest Escrow is licensed under NMSA 58-22 and regulated by the New Mexico Financial Institutions Division. We are a neutral third party and do not represent any party in a transaction. This article is informational and not legal, financial or tax advice. For questions about your situation, consult your attorney, CPA or insurance agent.