We are currently looking at escrowing taxes and insurance on commercial real estate loans. I have not found anything stating we can't or shouldn't, however we don't currently have a procedure to do so. We also are having some commercial customers coming in after the loan is booked asking for us to escrow. Are there any specific dos and don'ts? Does anyone have procedures they wouldn't mind sharing? What rules apply here?
We analyze our escrow accounts in December of each year with the payment change effective February.
Our taxes are billed based on the owner as of December 31 of the previous year. Taxes are due in October. So this year the estimated taxes due in October would be $260, based on the seller who owned the property as of last year end. The estimated taxes per the county for our borrower are based on the sales price will now be $5,600 based in part on this being our borrower's second home and having no tax exemptions available.
We collect a tax escrows at closing and based accrual payments on the $260 we estimated would be owed. My question is, to prevent payment shock to our borrower in the next year, do regulations allow us to change the estimated tax amount to $5,600 AFTER we pay the taxes this year, but BEFORE we perform the escrow analysis in December, or should we only collect taxes based on the $260 for the entire year of 2023 and depend on the borrower to voluntarily deposit extra escrow monies into his escrow account to make up the difference?
We're having issues setting up escrows on a property that was previously exempt for real estate taxes. The due date will be 1/31/24 with an investor cushion of 2 months. Our system (Encompass) is going back to 11 months and that will collect too much for 2022.
Are surplus escrow funds required to be mailed out in the form of a check to customers, or are there other ways the funds can be provided back to the borrower?
Are Banks required to pay interest on a mortgage escrow account with a balance of $25,000.00 or more?
We normally perform escrow analysis annually each year in January on all our escrowed loans. It is now February and we realized this was not done. Doing the analysis now, a month later - will this affect anything adversely? We usually give the customers notice 60 days before changing their payments which was usually in March. Assuming we need to wait now until April. Will this affect them in anyway having a 13 month cycle now versus what would normally be a 12 month analysis time frame? And then next year should we keep the analysis in Feb or go back to January which would result in a short 11 month cycle next year?
If an interest rate adjustment occurs on the mortgage at the same time escrow analysis is completed, can these notices be combined?
Should the payment change date on the table for the Interest Rate Adjustment reflect the payment change for escrow analysis if that date is before the date the payment changes for the interest rate? Ex. Rate changes May 1st. Payment would change June 1st, but the payment also changes May 1st for escrow analysis. The table shows payment change for May 1st.
Can the Annual Escrow Statement be provided to the borrower using an e-statement or must a paper copy be snail mailed to borrower?
If a loan is delinquent for more than 30 days and the annual escrow statement is not sent, can the annual analysis still be ran and if the loan is re-instated, the history provided at that time? To clarify, still run the annual analysis and provide all if the account is re-instated when the annual statement being provided is resumed.
Is there a rule on escrow analysis's that if the loan shows getting a refund, and it's 90 days past due that we don't have to issue the escrow refund?