Can we assess a late charge on past due escrow amounts? ex. Payment is supposed to be $600--$500 toward principal/interest and $100 toward escrow. Borrower only pays $500. What is the order of payments? Does the payment have to be applied to escrow first? If not, can we assess a late charge on escrow amount not paid?

You can make the order of payments anything you want, but it needs to be spelled out in the loan contract. I've always been an advocate of applying escrow before principal. That way, if they are short, you're still funding the escrow and they are past due on the principal.

If you have principal followed by escrow, I don't know if you can apply a late charge. That would be spelled out in your contract.