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.

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?

good point. What the lender wanted to do is increase the loan amount if the bank pays for the taxes.

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.