Answer:
Reg. X - RESPA 1024.17(c)(7).
. . . . . In cases of unassessed new construction, the servicer may base an estimate on the assessment of comparable residential property in the market area.
Avoiding Escrow Payment Shock
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Question:
If we know a borrower's taxes will be much higher in the second year, are we allowed to use the higher tax amount when we establish an escrow account.........OR..........are we required to estimate the tax payment based on the amount the taxes will likely be the first year and depend on the borrower to VOLUNTARILY add escrow monies to the escrow account to prevent payment shock the following year?
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