Can excess Escrow funds be applied to a loan payoff directly rather than be refunded to the customer?

We stopped netting the positive escrow a few years ago based, in part, on info found in the threads. If you search on +escrow +payoff you'll find a fair amt of info and opinions. Here's one to get you started.

The escrow funds are not yours. With the borrower's permission, you could apply it to the payoff, but you can't assume or automatically do so. The new RESPA rules clarify this by requiring escrow payoffs to be shows in the 200 series of a new loan. See the Q&As.