For better or worse, I made a decision. Here's my thought process on the two regulatory issues at play: RESPA and Reg Z (TRID).
RESPA does not require an escrow be established at closing. It may occur later. If established post-closing, 1024.17(g) kicks in, which requires an initial escrow account analysis and statement. This statement may be submitted to the borrower at settlement or within 45 calendar days after. If the statement is not incorporated with TRID docs, then the servicer shall submit it as a separate document.
Next,1024.18(f)(ii) kicks in when there is a deficiency. Since this deficiency will be greater than 1 month’s escrow payment, we have only 2 ways to deal with it: Allow it to exist and do nothing to change it; or Repay it in 2 or more equal monthly payments.
TRID re-disclosure is not applicable here. 1026.19(f)(2)(iii) states: “Changes due to events occurring after consummation. If during the 30-day period following consummation, an event in connection with the settlement of the transaction occurs that causes the disclosures required under paragraph (f)(1)(i) of this section to become inaccurate, and such inaccuracy results in a change to an amount actually paid by the consumer from that amount disclosed under paragraph (f)(1)(i) of this section, the creditor shall deliver or place in the mail corrected disclosures not later than 30 days after receiving information sufficient to establish that such event has occurred.”
This means the CD must have been inaccurate for an amount actually paid by the consumer at closing. Since we are establishing escrow post-closing, the CD was accurate for the amount actually paid by the consumer at closing. Cross reference this with the RESPA requirement for a post-closing initial escrow analysis. A lump sum may not be collected!
In short, there is nothing to re-disclose. The CD accurately stated what occurred at closing, and the post-closing event does not change what the borrower actually paid at closing. They’ll be paying for it later, according to the initial escrow analysis and statement.
Bottom line, do not issue a post-closing CD. Only issue the RESPA escrow documents needed to comply with 1024.17(g).
That's what I'm going with, anyway.
If anyone thinks I've totally lost it, please tell me!