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#2174488 - 04/20/18 04:54 PM Escrow Account Analysis Inquiry
cwscb Offline
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Joined: Jan 2018
Posts: 31
Is there a rule about how much the lender sets the required beginning balance?

I'm currently doing the annual analysis on an escrow account and for the upcoming months, the escrow deposit will be $577.43/month and the current projected balance is $931.31. My question is, how do I define the required balance projection?

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#2174508 - 04/20/18 06:17 PM Re: Escrow Account Analysis Inquiry cwscb
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
I guess I am a little confused. Is this an initial escrow analysis or an annual analysis? If annual, you take the beginning balance and schedule your disbursements, then the escrow payment will be determined based on the balance in the account not failing below your selected cushion anytime throughout the year.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2174518 - 04/20/18 06:49 PM Re: Escrow Account Analysis Inquiry cwscb
cwscb Offline
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Joined: Jan 2018
Posts: 31
Is there a set standard for selecting the cushion? Some say it can't be over 1/6 of the total annual estimated escrow deposits and some say it is up to 2 months of the monthly escrow deposit.

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#2174520 - 04/20/18 07:06 PM Re: Escrow Account Analysis Inquiry cwscb
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
1/6th of annual and 2 months are the same figure.

REPSA limits the cushion to no greater than one-sixth (1/6) of the estimated total annual payments from the escrow account. State law may be more restrictive.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2174616 - 04/23/18 03:45 PM Re: Escrow Account Analysis Inquiry cwscb
cwscb Offline
Junior Member
Joined: Jan 2018
Posts: 31
Got it, thank you!

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