If the borrower is entitled to a refund of an escrow surplus, if the borrower is more than 30 days delinquent, the bank can keep the surplus, but can't setoff against it.
Last edited by stach23; 02/19/20 07:04 PM.
Per 1024.17(f)(1)(2)(ii): These provisions regarding surpluses apply if the borrower is current at the time of the escrow account analysis. A borrower is current if the servicer receives the borrower's payments within 30 days of the payment due date. If the servicer does not receive the borrower's payment within 30 days of the payment due date, then the servicer may retain the surplus in the escrow account pursuant to the terms of the federally related mortgage loan documents.