You are within striking distance of qualifying for a mortgage. You can raise your score by focusing on the methods to increase your score. I have a contact who helps with this by advising what to do. Deposit this much in this account and don't touch it....apply for this gas card and use it this much and pay so and so. It is possible to raise a score by 50 points over 6-12 months!
If you are at 620 and make less than $72,000 you may qualify for a down payment assistance program that is FHA approved. Buy a home for 1/2 % plus closing costs. Pretty amazing!... more
What happens? Since you're now in violation of the terms of your loan, your lender can foreclose.
The bank is trying to protect its investment. Your property is security for their investment. They want to make sure that nothing happens (such as unpaid taxes) that can threaten their security--your home. And so they want control over the process of making sure that taxes are paid. That's the same reason they want to make sure that you have insurance on your home.
Continue with the escrow arrangement. It's what you agreed to. It doesn't cost anything.... more