One of our lenders would like to create an escrow account for a customer that owes past due real estate taxes. Can we do this?

Not unless you're ok with the tax lien being in front of your mortgage.
The past due tax bill needs to be paid.
Maybe the lender wants to do a loan for the full past due tax amount, pay the bill and let them pay it off monthly?

That's what I suggested Truff but the lender doesn't want to give this customer more money. This credit is heading into troubled debt territory so things could go south in a hurry. Our CLO is looking for a citation or guidance or something in writing somewhere that says we can or can't do this.

If you establish an escrow you have to follow the rules found in 1024.17. You have to perform the initial analysis and provide it within 45 days from the establishment of the escrow account.

Remember the analysis year is the 12 month period ending from the date the first escrow payment is due.

Ask your CLO and LO how they intend to fund the required initial deposit established from the initial analysis.