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#2154030 - 11/17/17 03:00 PM Statement at Escrow Closure
terpsfan Offline
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I know a short year statement is required at payoff but what about closure of the escrow account without payoff(separate of the TILA cancellation notice)?

(iii) Short year statement upon loan payoff. If a borrower pays off a federally related mortgage loan during the escrow account computation year, the servicer shall submit a short year statement to the borrower within 60 days after receiving the payoff funds.

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#2154039 - 11/17/17 03:49 PM Re: Statement at Escrow Closure terpsfan
rlcarey Online
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rlcarey
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Galveston, TX
Not sure why you would not want to send an accounting of the account regardless of any regulatory requirements.
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#2154047 - 11/17/17 04:12 PM Re: Statement at Escrow Closure terpsfan
terpsfan Offline
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We want to but our system does not easily produce one so I am trying to determine whether there would be issues with not.

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#2154587 - 11/22/17 03:25 PM Re: Statement at Escrow Closure terpsfan
Always In Training Offline
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Where the Green Grass Grows
Our system will only generate a escrow statement for a closing escrow account if the loan has paid off. I was generating a short year manually in Word prior to the escrow closing disclosure requirements. I have to manually generate these disclosures, so I don't generate the short years' statements on non-paidoff closed escrow loans anymore. I don't like it, but if its not required and it takes hours to do - I have to triage our time.

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#2195093 - 10/10/18 03:10 PM Re: Statement at Escrow Closure terpsfan
LK Offline
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Wondering if I can revive this question as we are having the same issue with our system when we close an escrow account before payoff of the loan. I'm wondering if we can instead of providing a manual short year statement, just provide the annual escrow statement when it comes due? Is there timing issues that may come into play? I can't seem to find any discussions on this situation within the current regulation.

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#2195177 - 10/11/18 12:15 PM Re: Statement at Escrow Closure terpsfan
David Dickinson Offline
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David Dickinson
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Central City, NE
If you close out a loan that has an escrow account tied to it, you must provide an escrow payoff statement (a short year statement with no new projection). You must also provide a new initial disclosure for the new loan. I don't believe it's okay to just provide the annual statement - acting like the old escrow account continued into the new loan. The old escrow account was tied to the old loan that was paid off. It's dead. Close it out and start a new escrow account computation year with the new loan/escrow.
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#2195194 - 10/11/18 02:15 PM Re: Statement at Escrow Closure terpsfan
LK Offline
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Sorry I wasn't clear. We are closing escrow but the loan is not paid off - just removing the escrow. 1024.17(I)(4) addresses the need for a short year statement at servicing transfer and loan payoff. This situation doesn't fall into either of these scenarios - just cancelling escrow at customer's request. I'm guessing it's BEST to send a short year, but if our system doesn't allow us to generate one other than in the two instances covered by the regulation, would it be OKAY if we waited until the annual escrow computation year is complete to send the regular annual notice. That would at least give them the transactions that occurred in the escrow account for the previous year.

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