I have a question that I haven't been able to find the answer to, and am wondering if anybody can shine some light for me. On our annual statements, we have verbiage that states:

"Under Federal Law, your lowest monthly balance should not have exceeded $XXX or 1/6 of anticipated payments..."

My question is, what happens IF the lowest balance is less than $XXX or 1/6?

Lower is fine, higher is not.

Sorry, Dan. Yes, I meant if it exceeds that threshold? I was typing faster than my mind was thinking, was only on my first cup of coffee.

The low balance should be no more than 1/6 of the annual disbursements. Otherwise, there is a violation of 1024.17. An exception is permitted, though, if the borrower has specifically requested (in writing) a larger escrow payment amount, generally in order to anticipate escrow shock when real estate gets re-assessed for taxes after improvements. That request is only valid until the next annual escrow analysis/statement.

Thank you, John, I appreciate it sir!