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#1749581 - 10/16/12 04:56 PM Can you collect escrow cushions on PMI?
SouthernBanker Offline
100 Club
Joined: Aug 2011
Posts: 105
Hello -

Can we collect escrow cushion on PMI when it is paid monthly?

I found some 2009 guidance that states:

"Overcharges in the collection of initial escrow deposits generally result when errors are made in the initial analysis. Other calculation or system entry errors can result in errors in the escrow deposit amounts. Some examples include:
-Including mortgage insurance (MI) premiums in cushion amounts when MI premiums are paid monthly."

Does this mean that you cannot collect an escrow cushion for PMI that is paid monthly?

Here's the link:

http://www.philadelphiafed.org/bank-reso...arter/q2_03.cfm

I appreciate your help.

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#1749657 - 10/16/12 07:15 PM Re: Can you collect escrow cushions on PMI? SouthernBanker
Truffle Royale Offline

10K Club
Joined: Jul 2003
Posts: 17,285
We collect two months cushion on regular PMI here.
You must figure that into your amortization schedule and move the PMI cut-off date up two months. Then you use the cushion to pay the last two months of the PMI when due.

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