Posted By: Rosebud123
Escrow Shortage - 11/07/08 02:19 PM
If a client has an escrow shortage can we give them a loan for the shortage and charge interest. Commercial or Residential?
I am thinking that residential we cannot.
Posted By: rlcarey
Re: Escrow Shortage - 11/07/08 02:41 PM
You have to follow the escrow rules in RESPA for residential loans subject to RESPA.
Commercial is wide open unless prohibited by State law. I guess if someone can't pay thier escrows, I would question why you would make them another loan?
Posted By: Rosebud123
Re: Escrow Shortage - 11/07/08 02:46 PM
good point. What the lender wanted to do is increase the loan amount if the bank pays for the taxes.
Posted By: rlcarey
Re: Escrow Shortage - 11/07/08 03:07 PM
If you are talking about a commercial loan, you would have to look to your loan contract or escrow agreement for guidance.
It would be prohibited under RESPA.