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!

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.

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.

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.

I appreciate your quick response. Thank you!