How to Protest Property Taxes When You Pay Through Escrow (Step-by-Step)

Your mortgage company pays your property taxes. So you can't protest them, right?

That's a myth—and it's costing you money every month.

Escrow is simply a payment mechanism. Your lender writes the check, but it's still your money, your home, and your legal right to challenge an overassessment. The county doesn't care who pays—they care that the property owner (you) agrees to the assessed value.

Here's the best part: when you successfully protest and reduce your property taxes, your monthly mortgage payment drops automatically. You could be saving $100+ per month right now.

This guide breaks down exactly how to protest property taxes when you have an escrow account—step by step, no jargon, no confusion.

How Escrow Actually Works (And Why It Doesn't Block Protests)

Let's clear up the confusion. Escrow is a convenience feature, not a transfer of property rights.

Here's the actual flow:

1. Your lender estimates your annual property taxes and insurance costs
2. They divide by 12 and add that amount to your monthly mortgage payment
3. Those funds sit in an escrow account managed by your servicer
4. When taxes are due, the servicer pays the county from your escrow balance

The critical point: they're paying with your money, on your behalf. They're not the property owner. They have zero authority over whether you can challenge your assessment.

According to the Consumer Financial Protection Bureau (CFPB), mortgage servicers are required to conduct annual escrow analyses and adjust payments when tax amounts change. When you win a protest, your servicer must recalculate—it's federal law.

Why You Should Definitely Protest If You Have Escrow

Here's the math that should get your attention:

Example scenario:

• Current annual property taxes: $8,400
• Monthly escrow portion: $700
• You protest and win a 15% reduction
• New annual property taxes: $7,140
• New monthly escrow portion: $595
• Monthly savings: $105
• Annual savings: $1,260

That $105 stays in your pocket. Every single month. For as long as you own the home.

Over 10 years? $12,600 in savings.

Over a 30-year mortgage? Nearly $38,000.

And if you use TaxDrop's contingency-based service, you pay nothing unless you save money.

Step-by-Step: How to Protest Property Taxes with Escrow

The process is identical whether you pay taxes directly or through escrow. Your mortgage company isn't involved in the appeal—they're just the payer.

Step 1: Get Your Property Tax Assessment Notice

Even with escrow, you should receive an assessment notice from your county showing:

• Your property's assessed value
• Taxable value after exemptions
• Tax amount owed
• Appeal deadline

Don't see it? Look up your assessment online:

• Texas: Search your county's Central Appraisal District (CAD) website
• California: Check your county Assessor's website

Key deadlines:

• Texas: May 15 (or 30 days after notice date, whichever is later)
• California: July 2 – November 30 (varies by county)

Step 2: Determine If You're Overassessed

Look for these red flags:

• Assessment exceeds market value – Compare to recent sales of similar homes within 0.5 miles
• Property record errors – Wrong square footage, bedroom count, or features you don't have
• Unequal treatment – Your assessment jumped more than similar neighbors
• Condition issues ignored – Aging roof, foundation problems, outdated systems

According to the National Taxpayers Union Foundation, an estimated 60% of U.S. homes are overassessed. Chances are good you have grounds for a protest.

Step 3: File Your Protest

You file the protest, not your mortgage company. You're the property owner—you're the appellant.

In Texas:

• File online through your county CAD's website (most have e-filing)
• Or mail/deliver Texas Comptroller Form 50-132
• Check both boxes: "Value is over market value" AND "Value is unequal compared with other properties"

In California:

• File Form BOE-305-AH with your county Assessment Appeals Board
• Most counties accept online submissions

Do NOT contact your mortgage servicer to "ask permission." They have no authority over your appeal. They're not involved.

Step 4: Gather Your Evidence

Build your case with:

• Comparable sales: 3-5 similar properties that sold for less than your assessed value
• Property record corrections: Documentation showing errors in your assessment
• Photos of condition issues: Roof damage, foundation cracks, outdated systems
• Contractor estimates: Repair quotes for major issues
• Professional appraisal: If you have a recent one (optional but helpful)

Resources for finding comparable sales:

• Zillow – Recent sales data
• Realtor.com – Market insights
• Your county appraisal district website – Official recorded sales

Step 5: Present Your Case

Texas process:

1. Informal hearing: Meet with a county appraiser first (85-95% of cases settle here)
2. ARB hearing: If no agreement, present to the Appraisal Review Board
3. Further appeals: Binding arbitration or district court if still unsatisfied

California process:

1. Assessment Appeals Board hearing: Present evidence to an independent panel
2. Decision: Board issues written determination within 45-60 days

Your mortgage company never attends these hearings. This is between you (property owner) and the county (taxing authority).

Step 6: Notify Your Mortgage Servicer

After you win, send your servicer:

• Copy of the county's appeal decision
• New assessment notice showing reduced value
• Letter requesting immediate escrow adjustment

Under the Real Estate Settlement Procedures Act (RESPA), your servicer must:

• Conduct annual escrow analyses
• Refund surpluses exceeding $50
• Provide written explanation of calculations

Most servicers adjust your payment within 30-60 days. If they drag their feet, you can file a complaint with the Consumer Financial Protection Bureau.

Common Myths About Protesting with Escrow (Debunked)

Myth #1: "My mortgage company won't let me protest."

Reality: They have zero authority over your appeal. You don't need permission.

Myth #2: "The savings just go to escrow, not to me."

Reality: Lower escrow = lower monthly payment. That money stays in your bank account.

Myth #3: "Appealing might violate my mortgage agreement."

Reality: Your agreement requires you to pay taxes—not overpay them.

Myth #4: "My mortgage company will appeal for me."

Reality: They almost never do. They have no financial incentive—the burden falls on you, not them.

What Happens to Your Mortgage Payment After Winning

When your property taxes decrease, one of two things happens:

Option A: Lower payment + refund check

If your escrow account has a surplus exceeding $50, your servicer sends you a refund and lowers your monthly payment.

Option B: Lower payment only

Surplus under $50 stays as cushion, but your monthly payment still decreases.

Either way, you win.

Real Numbers: What This Looks Like

Before protest:

• Monthly principal & interest: $1,500
• Monthly escrow (taxes + insurance): $850
• Total monthly payment: $2,350

After 15% tax reduction:

• Monthly principal & interest: $1,500 (unchanged)
• Monthly escrow: $745 ($105 less)
• Total monthly payment: $2,245

Your savings:

• Annual savings: $1,260
• 10-year savings: $12,600
• 30-year savings: $37,800

TaxDrop Makes Protesting with Escrow Simple

Here's how it works:

1. TaxDrop analyzes your assessment (free, no obligation)
2. If overassessed, TaxDrop files and fights your appeal
3. You provide documents to TaxDrop (not your mortgage company)
4. TaxDrop wins your reduction
5. You send the decision to your mortgage servicer
6. Your monthly mortgage payment drops automatically

Cost: $0 upfront. TaxDrop only charges 25% of your first year's savings—and only if you win.

Your mortgage company stays completely uninvolved in the process.

Take Action Now

Your mortgage company isn't going to challenge your assessment. The county isn't going to tell you you're overcharged. Every month you wait is another month of overpaying.

1. Look up your property assessment on your county's website
2. Compare your assessed value to similar homes nearby
3. Check your appeal deadline
4. Get a free assessment review from TaxDrop (takes 60 seconds)

Escrow changes how you pay taxes. It doesn't change your right to challenge them.

Check if you're overpaying in 30 seconds → free assessment review