Our collectors are insisting that we take funds from the customer's escrow balance to bring the principal and interest payment current. I don't believe we can do that, but can't find the citation. Can anyone point me to that in RESPA?

Try your loan and escrow agreement.

Thanks, this particular circumstance does not seem to be addressed.

try this If you go to the home page of BOL and use the search box there you can often find answers to questions similar to the one you may have.

Thank you. I had come to the conclusion that we can't apply escrow funds to bring the account current based upon the exact scenario that you found regarding surpluses. My reasoning is that if we can't use a surplus, then we likewise can't take any funds from the escrow balance.

I also found a HUD Q&A that indicates we should look to state law or the mortgage documents. If pushed, I'll ask for written customer permission.

I've been asked the same question in the past. After much debate, I asked how the bank was going to like having to use its own money to pay the taxes and insurance when they came due. Think about it. You use the escrow to pay the delinquency but you cannot just not pay the insurance or taxes so you have to use more bank funds on top of what you've already lent them. Truly a case of money talks because they heard and dropped the idea.

Agreed. That's throwing good money after bad, IMHO.

Not to mention you can't play around with an escrow account anyway...its almost like a form of a trust, wouldn't you say?