Short Year Escrow Statements and Overages

Answered by:

Question:

When we have an overage in an escrow account for a loan that has been paid off, where do the funds go and when do they have to be disbursed? What regulations address this?

Answer:

You will complete a short year statement under 3500.17(i)(4)(iii) within 60 days of the loan's being paid off.

According to 3500.17(f)(2), you will send any surplus to the borrower within 30 days of the analysis. Since the loan is paid and no further escrow requirement exists, the $50 rule is moot and all funds should be delivered.

First published on BankersOnline.com 10/4/04