Lowering Escrow Payment: Run Short Year Analysis?

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Question:

If we are lowering an escrow payment due to a reduction in the monthly PMI payment or say the flood insurance is no longer required and the customer no longer want to escrow for it. Do we need to run a short year analysis or can we just lower the payment by the amount of the monthly decrease and notify the customer in writing?

Answer:

Any escrow payment adjustment must be supported by an analysis.