Standard Payment Posting Order for Escrow Loan

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Question:

For a loan with escrow, what should the standard payment posting order be, and should the loan docs specify which escrow items get contributions in what order?

Answer:

An escrow account is an escrow account. Individual items that are paid out of the account do not have separate sub-ledgers. The money to pay an item from the escrow account is either there or it is not at the time of a billing coming due. Any deficiency in the escrow account would be handled under 1024.17(f).