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Allowed to Require Lump Sum Payment for Escrow?

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Question: 
I have a customer whose escrow payment for taxes was estimated at time of closing because his purchase was a new construction. The tax bill was not actually what we thought and we sent back a check for roughly $2500. His bill this past year went up and now the escrow account is short about $3600 compared with where it needs to be. We have just started escrowing in the last two years on all loans. Do we have to give the customer the option to pay in a lump sum or make it up through his payments or can we require a lump sum payment now?
Answer: 

12 CFR 1024.17(f)(3)

(ii) If an escrow account analysis discloses a shortage that is greater than or equal to one month's escrow account payment, then the servicer has two possible courses of action:

(A) The servicer may allow a shortage to exist and do nothing to change it; or

(B) The servicer may require the borrower to repay the shortage in equal monthly payments over at least a 12-month period.

First published on BankersOnline.com 7/16/12

First published on 07/16/2012

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