Skip to content

Guidelines on Escrow Cushions for Portfolio Loans

Answered by: 

Question: 
Our Bank has always used a one month escrow cushion for portfolio loans. We may start using two months for new loans. When the time comes to re-analyze annually all our loans, is it compliant to assume a one month cushion on older loans and two months on newer loans? Do you recommend uniform treatment?
Answer: 

Whether or not you can apply such a practice to existing loans may be subject to the loan contract. If the contract escrow provision only provides for a one-month cushion, you'll have to consult with legal counsel familiar with state contract law to determine if you can unilaterally change the provision, and what kind of notice you'll need in order to do so.

First published on BankersOnline.com 4/2/12

First published on 04/02/2012

Filed under: 
Filed under compliance as: 

Banker Store View All

From training, policies, forms, and publications, to office products and occasional gifts, it’s available here:

Banker Store

hot right now

image description

Looking for effective, convenient training on a particular subject?

BOL Learning Connect offers more than 200 courses ON-DEMAND or on CD ROM from AML to Reg Z and every topic in between.

Search Topics