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#2174488 - 04/20/18 12:54 PM Escrow Account Analysis Inquiry
cwscb Offline
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Registered: 01/22/18
Posts: 18
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 02:17 PM Re: Escrow Account Analysis Inquiry [Re: cwscb]
rlcarey Offline
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Registered: 07/16/01
Posts: 66394
Loc: 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 02:49 PM Re: Escrow Account Analysis Inquiry [Re: cwscb]
cwscb Offline
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Registered: 01/22/18
Posts: 18
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 03:06 PM Re: Escrow Account Analysis Inquiry [Re: cwscb]
rlcarey Offline
10K Club

Registered: 07/16/01
Posts: 66394
Loc: 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 11:45 AM Re: Escrow Account Analysis Inquiry [Re: cwscb]
cwscb Offline
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Registered: 01/22/18
Posts: 18
Got it, thank you!

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