Using escrow account surplus for delinquency
Answer by Mary Beth Guard and John Burnett, BOL Gurus Guru BIOS
Question: Let’s say we have an escrow account surplus on a loan with joint borrowers. If the loan is delinquent,
can the overage in escrow be applied? What if one owner wants the money disbursed to pay the loan and the other owner wants his money?
Answer: You can hold the money in the escrow account until the delinquency is satisfied, but you can’t apply it to the loan payments in arrears without
the borrowers’ consent. I recommend holding out until you get both borrowers’ approval before applying any of the escrow to the loan payments.
The original version appeared in the September/October 2004 edition of the Oklahoma Bankers Association Compliance Informer.
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