Skip to content
BOL Conferences Top Gun 23
Thread Options
#1652206 - 01/18/12 06:02 PM Using Escrow Funds to Satisfy a Delinquency
MollyMacMe Offline
100 Club
MollyMacMe
Joined: Apr 2009
Posts: 123
OH
I hope you BOL experts can help me.

If a loan is seriously more than 30 days past due, and it is unlikely that the borrower will ever catch up, can the FI use the escrow funds to satisfy the delinquency?

Also on the same account, if there isn't enough escrow funds to pay the upcoming real estate tax bill, is the FI obligated to make the tax payment knowing it will never be recovered? If so, for how long?

Thanks for any help you can give me.

Finally, if a loan is current, is it permissable to use the funds in the escrow account to make the final loan payment on a loan that is being paid off?
_________________________
The views, opinions, & judgments expressed here are mine. The contents have not been reviewed or approved by my employer.

Return to Top
Lending Compliance
#1652219 - 01/18/12 06:12 PM Re: Using Escrow Funds to Satisfy a Delinquency MollyMacMe
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,030
Bloomington, IN
You will need to consult your loan and security agreement along with your attorney but most likely you cannot "dip" into the escrow account to pay past due payments.

If the account is more than 30 days past due the timely payment escrow rules will not apply. See 3500.17(k)

You cannot use the escrow balance to make the last payment or deduct it from the payoff without the borrower's express (written) consent to do so.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

Return to Top
#1652238 - 01/18/12 06:24 PM Re: Using Escrow Funds to Satisfy a Delinquency Dan Persfull
MollyMacMe Offline
100 Club
MollyMacMe
Joined: Apr 2009
Posts: 123
OH
Thank you for your super fast reply, Dan.
_________________________
The views, opinions, & judgments expressed here are mine. The contents have not been reviewed or approved by my employer.

Return to Top

Moderator:  Andy_Z