I send our customers a letter the month before their analysis letting them know that they have a short fall. I also enclose a voluntary additional escrow payment agreement for them to sign if they want to pay their short fall. I have a few customers that do not send the voluntary agreement back with their payment. Would the bank be out of compliance if I accept the payment.

Considering that there are no provisions in RESPA that would allow you to do this and the recent citation of the CFPB regarding what is and is not allowed on shortages, I might be re-thinking this process.

See this thread: https://www.bankersonline.com/forum...e-on-annual-escrow-statement#Post2246429

I am not showing that they need to pay the lump sum on the analysis, I'm sending a letter a month before the analysis, because I get request from customers to pay the short fall. In the letter I let them know why they have a shortfall and what their payments would be if they pay the short fall and what they would be it they did not pay the short fall.

I know - but there are no provisions in RESPA to do that. The only communication that is set forth in RESPA is an escrow analysis statement - whether annual or a short year analysis. Whatever else you are doing is not specifically supported.

Thanks

Officially recognizing that "option" in a letter to your borrower runs afoul of the CFPB's analysis of the law and regulation, since the option does not exist. Put another way, the lender/servicer must avoid mentioning a lump-sum payment.

What the Bureau hasn't addressed is what the lender/service can do if the consumer/borrower starts that conversation or tenders a lump-sum payment on their own initiative. And perhaps that's a question we don't want to pose to the Bureau. If I were the lender/servicer in such a situation, I'd be very sure to document that the payment was at the borrower's initiative.

And I hasten to add here that having a pre-printed form for the borrower to sign stating that the lump-sum payment was their idea and never mentioned as an option by the lender/servicer would NOT be a good idea (since it screams that the lender/servicer had planned for just such a payment).

For your convenience and to perhaps assist you with budgeting any deficiency that may occur, we have just completed an analysis test and found that your escrow account has a shortfall of $356.30. This shortfall is due to an increase in your insurance premium ($1023.00 to $1197.00) and parish tax ($1040.76 to $1133.97). Therefore, we are offering you the option that is strictly voluntary, to make up this amount. Please note that this is not the annual analysis that we are required to perform as part of the regulatory requirement, but simply a courtesy to allow you the voluntary option as follows:

You may pay $356.30 to us by check or money order within 30 days of the date on this letter. If the payment is made, your mortgage payment will be $1474.45 a month.

Should you elect to do nothing, this shortfall will be divided over the next 12-month period. Therefore, beginning March 16, 2021, the escrow portion of your monthly payment will be $223.94, and your total payment, including the new escrow amount plus the principal & interest amount will be $1504.14.

Just sending what the letter states, so I should stop this practice?

"You may pay $356.30 to us by check or money order within 30 days of the date on this letter."

How is that any different than what the banks that got cited by the CFPB said in their annual escrow analysis disclosure? Not to mention that is there no provision for such a pre-notification in the regulations.

Personally, I might see noting wrong with it. But you are out in no-mans land if it comes down to defending the practice.

thanks

I would not want my bank to send such a letter, whether or not it was triggered by "the annual analysis," because it clearly shows that an analysis was done (whether or not it was the annual "official" analysis) and you are offering an option that is clearly not "blessed" in RESPA or Regulation X.

Thanks

Sorry I keep asking the same question, If a customer's insurance renewal increase by $200.00, and the customer calls because they want to deposit the increase into their Escrow acct, is this allowed? Or would we get a slap on the hand for this?

I guess the question is can a customer deposit extra into their Escrow Acct whenever they want to? The only thing I can find is if they have a surplus 50.00 or over we have to refund the surplus when we perform the analysis.

It depends on if you allow or your escrow account agreement addresses additional voluntary payments to the escrow account. There is no prohibition from accepting an additional voluntary deposit.