I hope you BOL experts can help me.

If a loan is seriously more than 30 days past due, and it is unlikely that the borrower will ever catch up, can the FI use the escrow funds to satisfy the delinquency?

Also on the same account, if there isn't enough escrow funds to pay the upcoming real estate tax bill, is the FI obligated to make the tax payment knowing it will never be recovered? If so, for how long?

Thanks for any help you can give me.

Finally, if a loan is current, is it permissable to use the funds in the escrow account to make the final loan payment on a loan that is being paid off?

You will need to consult your loan and security agreement along with your attorney but most likely you cannot "dip" into the escrow account to pay past due payments.

If the account is more than 30 days past due the timely payment escrow rules will not apply. See 3500.17(k)

You cannot use the escrow balance to make the last payment or deduct it from the payoff without the borrower's express (written) consent to do so.

Thank you for your super fast reply, Dan.