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#2270358 - 05/12/22 01:07 PM Annual escrow analysis on past due loan
1995Banker Offline
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Joined: Apr 2002
Posts: 241
1024.17(i)(2) states a bank isn't required to provide the borrower with an annual escrow analysis if the loan is more than 30 days overdue. My question is this: If the borrower is more than 30 days past due when the annual analysis is done, and there is an overage, can we apply that overage to the past due loan payment? I can't find any mention of it in RESPA.

Any advice or direction is appreciated!
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#2270369 - 05/12/22 02:50 PM Re: Annual escrow analysis on past due loan 1995Banker
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,931
Galveston, TX
No - you cannot. It is not your money. The only exception is that you can offset an escrow balance when quoting a pay-off of the loan.
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#2270383 - 05/12/22 04:47 PM Re: Annual escrow analysis on past due loan rlcarey
1995Banker Offline
100 Club
Joined: Apr 2002
Posts: 241
Thank you, Randy. I thought as much.

One more thing,..1024.34(b)(2)(b)...the official interpretation mentions "netting of funds", which is the exception you mentioned in your response, I believe. It says section 1024.34(b)(1) doesn't prohibit a servicer from netting any remaining funds in a escrow account against the outstanding balance of the borrower's mortgage loan. If a loan is being put in non accrual and an amount being charged off, can we take any funds in the escrow account to pay on the outstanding balance?

Thanks.
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#2270386 - 05/12/22 05:17 PM Re: Annual escrow analysis on past due loan 1995Banker
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,931
Galveston, TX
No - charge-off is an accounting action and has nothing to do with the underlying debt of the customer. You are required to continue to service the loans under the regulations.
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#2270397 - 05/12/22 07:09 PM Re: Annual escrow analysis on past due loan rlcarey
1995Banker Offline
100 Club
Joined: Apr 2002
Posts: 241
I appreciate your quick response. Thank you!
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