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#2147337 - 09/22/17 07:48 PM Re: Escrows and Disbursement Timing COKelly
BA13 Offline
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Oh I was hoping you wouldn't say that! It gets so difficult to train the right way then have investors want something else. We've come up against investors that want us to escrow for more than what's being paid out. I guess I don't see how they can do that as it's our violation, not theirs! Thanks!

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#2147343 - 09/22/17 07:56 PM Re: Escrows and Disbursement Timing COKelly
rlcarey Online
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rlcarey
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Galveston, TX
They buy it, they own it.
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#2148483 - 10/03/17 07:31 PM Re: Escrows and Disbursement Timing BA13
John Burnett Offline
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John Burnett
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Cape Cod
Originally Posted By BA13
... therefore there is no tax disbursement due in the escrow computation year. We would not set up a tax payment because there's no tax outflow, correct? ....

Wouldn't there be a tax outflow in April or May of 2018, which would be within the escrow computation year?
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#2148484 - 10/03/17 07:32 PM Re: Escrows and Disbursement Timing COKelly
John Burnett Offline
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John Burnett
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Cape Cod
Or are the 2017 taxes, which were prepaid by the seller, due in November of 2017 and May 2018?
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#2148494 - 10/03/17 07:49 PM Re: Escrows and Disbursement Timing COKelly
rlcarey Online
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rlcarey
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Galveston, TX
Property taxes in Texas and some other jurisdictions are due in December of each year. Even if tax are due twice a year, without both halves in the initial analysis it will generate a payment shock in the second year.

The Minn. FRB addressed it in this article: https://www.minneapolisfed.org/publicati...row-disclosures
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#2174920 - 04/24/18 06:12 PM Re: Escrows and Disbursement Timing COKelly
AuditLove Offline
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Joined: Jan 2015
Posts: 23
Hi! I'm jumping in the convo regarding an old topic but it has reared its ugly head for us now! smile

Regarding the exact situation above: loan closes in September, first loan payment in November. First half taxes are due in October for which we have obtained funds for at closing. Currently, we hold those funds in an LIP account (loans in process) and then make the tax payment in October outside of escrow. So our initial escrow analysis does not show the October disbursement nor the funds for the disbursement; instead it starts with the first loan payment in November and spreads it over the 12 months.

Is there any way that we could pay and show this October disbursement on the initial escrow analysis without any loan payments for the first 2 months of the analysis?

Thanks for your help as always!

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#2174928 - 04/24/18 06:26 PM Re: Escrows and Disbursement Timing COKelly
AuditLove Offline
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P.s. No investor involved smile

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#2174946 - 04/24/18 06:59 PM Re: Escrows and Disbursement Timing COKelly
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
No. The analysis has to be performed based on the computation year which does not start until the first scheduled payment.

Escrow account computation year is a 12-month period that a servicer establishes for the escrow account beginning with the borrower's initial payment date. The term includes each 12-month period thereafter, unless a servicer chooses to issue a short year statement under the conditions stated in §1024.17(i)(4).
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#2174949 - 04/24/18 07:06 PM Re: Escrows and Disbursement Timing COKelly
rlcarey Online
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rlcarey
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Galveston, TX
Sounds like you are already handling these tax payments correctly, as they would be disclosed to the borrower under Section F: Prepaids on the Closing Disclosure.
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#2175113 - 04/25/18 03:34 PM Re: Escrows and Disbursement Timing COKelly
AuditLove Offline
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Joined: Jan 2015
Posts: 23
Thank you both! This is what I thought and will make my meeting next week go quickly!

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#2279773 - 01/12/23 07:47 PM Re: Escrows and Disbursement Timing COKelly
Compliance NABW Offline
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Joined: Oct 2015
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For what it's worth, lol, I agree with Randy on the earlier debate and I have mentioned to other compliance people previously that bringing a payment forward by a month in situations where the tex is due in the 13th month is a way to avoid a payment shock situation. My property taxes are due in November, but I get the bill for that in late September or early October. I can make my payment in October just fine. I don't have to wait until November to make the payment.

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