If we have a customer that runs past due and does not have enough money in his escrow account at the time taxes and insurance are due, is the bank obligated to pay these premiums? If we are, can they be added back to the principal balance of the loan.

;)I know we have to force place flood if it is not paid by the customer and the premium can be added back to the note.

Respa 3500.17 sections f & k have your answers!

So, if I read those sections correctly, if the borrower's payment is not more than 30 days overdue, the bank MUST advance funds to make disbursements, but then must get the reimbursement through the methods outlined in section f; which means we can't just add the advance to the principal amount of the loan, correct?

And, again, if I'm reading correctly, if the borrower is more than 30 days overdue, the lender has to consult the contract for methods available for resolution (which might include adding it to the principal if so stated), right?