I was asked by management to research what is entailed in establishing escrow accounts. Any information you could give me would be greatly appreciated, as I don't know a thing about setting up these accounts. I have looked at RESPA, but I was told that it varies from state to state.

Thanks!

You may want to check with your core vendor. They may have other banks utilizing their software for escrows and be able to help you establish some guidelines.

Thanks!

I used to work at a bank that handled escrows. That was back in 1997. If I remember correctly the bank would get the estimate of the re taxes and homeowners insurance for the year. Divide it by 12 and add that amount to the monthly payment. The bank could only have the equivelant of 2 or 3 months of premium in the escrow account at one time. The bank has to send out statements and I don't remember how often. Sometimes the escrow account would be in the negative because of a premium change that had not been assessed at the beginning of the year. Now don't quote me on all this because it probably has changed since I worked with them.

There seemed to be so many little details and the escrows seemed to take a lot of time and work. That is why you should check with your core vendor and if other banks in the state are using the escrow part of the software, you should call them for information. They would be your best resource.

Snowqueen sounds about right. I know you don't have to pay interest on Escrow accounts in Minnesota, but your vendor would know that, too. They work quite well on the computer, as long as a lot of fiddling, e.g., payment reversals, etc. is not done on the loan.