Late Charges and Escrow Analysis - John Burnett

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Late Charges and Escrow Analysis
by Dan Persfull, BOL Guru
Guru BIOS

Question: We have a customer who is paying regularly, but late. Can we pay the late charges on the loan from the escrow account there for taxes and insurance?

Answer:No, LCs are not an expense paid in relation to a mortgage loan. They are a penalty for late payments.

You will need to either "beef up" your collection efforts or you will have to wait until the loan is paid off to collect the accrued LCs.

First published on BankersOnline.com 2/21/05

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