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#2195297 - 10/12/18 01:35 PM Deficient Escrow Account and Advancing Loan
Tesla Offline
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Joined: Nov 2003
Posts: 3,726
Hi! We have an escrow account that is deficient (has a negative balance). We want to advance the loan and pay the shortage, but didn't the rules change and we have to take the funds from our own account and pay the deficiency and then we run an escrow analysis and can require repayment in two or more months- but we CANNOT increase the principal on the loan (advance) right?
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RESPA
#2195301 - 10/12/18 01:58 PM Re: Deficient Escrow Account and Advancing Loan Tesla
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,371
Galveston, TX
Yes - see 1024.17(k)(2)
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#2195302 - 10/12/18 02:01 PM Re: Deficient Escrow Account and Advancing Loan Tesla
Tesla Offline
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Joined: Nov 2003
Posts: 3,726
Ok - but bear with me here - the loan is more than 30 days past due and there are no funds in the escrow account. When they say "advance funds" is it funds from our account or do we advance on the loan (increase their principal)? I think I might be confusing investor rules with portfolio rules (investor rules require advancing bank funds and seeking reimbursement on those funds later).
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#2195305 - 10/12/18 02:09 PM Re: Deficient Escrow Account and Advancing Loan Tesla
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,371
Galveston, TX
"Advance funds" are your funds, but if the customer is more than 30 days past due, you are free to do whatever your loan contract allows.
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#2195306 - 10/12/18 02:11 PM Re: Deficient Escrow Account and Advancing Loan Tesla
Tesla Offline
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Joined: Nov 2003
Posts: 3,726
Got it! Thank you Randy! You are always so helpful! I appreciate it!
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