I have the following statement generated by our system and I want to get some feedback to see if this is being handled properly.

Escrow period ends in June 2016. Escrow payment $92.54. Customer has not made a payment since January 2016. The account history page shows this:

February - $0
March - $0
April - $0
May - $92.54 (System assumed this would be made.)
June - $92.54 (Same for this one.)
And it shows an ending escrow balance of -$122.80.

Then the new projection page shows a starting escrow balance of $247.36. This number is obtained by not only assuming the last 2 payments would be made, but also the February, March and April payment would be made.

My questions are:
Shouldn't the ending escrow balance on the account history page match to the starting account balance on the new projection page?

If so, which page is correct? The account history or projection page?

Any thoughts are appreciated.

(I am aware of this 1024.17(i)(2); however, this has already been mailed to the customer by our operations staff. I am just trying to figure out if what we sent out is accurate for my compliance review.)

Thanks!

Customer has not made a payment since January 2016.

Why are you generating a statement for an account more than 30 days past due?

(2) No annual statements in the case of default, foreclosure, or bankruptcy. This paragraph (i)(2) contains an exemption from the provisions of § 1024.17(i)(1). If at the time the servicer conducts the escrow account analysis the borrower is more than 30 days overdue, then the servicer is exempt from the requirements of submitting an annual escrow account statement to the borrower under § 1024.17(i). This exemption also applies in situations where the servicer has brought an action for foreclosure under the underlying federally related mortgage loan, or where the borrower is in bankruptcy proceedings. If the servicer does not issue an annual statement pursuant to this exemption and the loan subsequently is reinstated or otherwise becomes current, the servicer shall provide a history of the account since the last annual statement (which may be longer than 1 year) within 90 days of the date the account became current.

Our system generated the notice and our operation staff sent it to the customer.

They shouldn't have, but they did, so I am coming in on the back end and trying to figure out if what we sent them was correct.

I don't think it was, but I was wanting some feedback to make sure I am correct.

Thanks!

Shouldn't the history page show what was projected and actual? Its been a while since I had to look at an escrow statement, but I recall ours showing both projected and actual. Then (again, if I recall correctly) for the projected for the next year it would be based on the beginning actual balance (in your case -122.80).

The history page does show projected and actual. It is the anticipated last 2 months that are the problem. The first 10 months show actual payments to and from the acct. However, the anticipated payments are based on the 'billing date'. Even though the customer will make payments in the last 2 months, because the billing date shows one of those payments as already paid, no payment will be anticipated.

For example, last 2 pmts are Mar & April. Pmt due date is 3-1. The customer pays the 3-1 bill on 2-27. The processor will anticipate no pmt for March. This makes the ending bal on the history short one payment, even though the customer makes 12 payments.

It doesn't make sense to me to populate actual pmts for 10 months, but switch gears and populate the last 2 pmts based on the 'date paid to'. It shouldn't matter what billing date the last 2 payments would satisfy - just as it doesn't matter what billing dates the first 10 months payments satisfy.

Leaving out a payment on the history makes the customer pay a shortage he shouldn't be paying, since the shortage/surplus is calculated based on the ending balance on the history.