Can we pass on the third party cost for insurance and tax monitoring to our customers?

What fees that you are allowed to charge a consumer is a State law issue.

So we know that we need to check our state laws to determine if we can pass this service on to our customer, but for the sake of argument, if we can pass this fee on to our borrowers at origination and then a few years later a borrower request to cancel escrow, we cancel per their request, then a year later they would like to set up escrow again. Does anybody charge this service each time an escrow account is established after origination? We have some borrowers who start and stop their escrow accounts on a regular basis. Thanks!

We have some borrowers who start and stop their escrow accounts on a regular basis.

Any bank that allows that happen - well...…………………. It is usually one and done - especially with the new escrow cancellation hoops you have to jump through.

Thanks Randy! Sounds like we may want to consider what we allow in the servicing area.

I explain it this way:
When a lender escrows for a borrower, the lender is taking on a fiduciary responsibility. The lender takes on risk of calculating proper amounts, and making timely payments. Borrowers can have voluntary escrow accounts and stop this process at any time, but if the lender is taking on these responsibilities, they aren't paying games. Thus, borrowers can't start/stop, make escrow payments some months but not others, etc. You're either in or you're out.