Are there any other banks that are allowing borrowers to finance in the intial escrow deposit if LTV allows? Is this even legal?
Thanks!

We do it all the time, no different than any other closing cost.

Thanks Dan! We have also, but someone told us we couldn't do it.

Have that someone back up their statement with chapter and verse of the regulation or law that prevents it. If there is such a regulation or law it would have to be state driven.

I agree with Dan. The escrow amount (1000s) is no different than any other service. It all rolls into line 303 of the HUD-1. I'm not aware of any prohibition of financing the escrow. Maybe it's a state law issue.

What if the loan is a HPML and we are financing the initial escrow deposit? Would this be viewed as predatory? We do include the monthly amount owned for mortgage-related obligations in their monthly payment.

Thank you!

Isn't the initial escrow deposit always financed?? I know few banks that require this be paid in cash at closing.

Ok if you finance the escrow of insurance & property taxes, is this loan recindable? We have conflicting thoughts and answers.

Those are costs associated with the refinancing of the loan therefore they would not be considered new money.