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Where to Place Funds in Escrow Account

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Question: 
We have a refinance of a new construction note (no seller) where the sod and sprinklers were unable to be completed prior to closing the permanent loan. The title company is holding the funds in an escrow account to complete the sod and sprinkler work after the loan closes. The sod and sprinkler escrowed funds are apart of the original construction loan amount and not a settlement service in my opinion. Where do we put the funds that are held in the escrow account at the title company on the settlement statement? Do we put them in the 1300 section? Do we leave it off the settlement statement all together since it is not a settlement charge?
Answer: 

These fees are not settlement services. Therefore, they are not listed in Section L (700-1300's) of the HUD-1/1A. Any fees, like this, needed to be collected from a borrower at closing should be listed in the 100 series.

First published on BankersOnline.com 10/3/11

First published on 10/03/2011

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