1024.17(i)(2) states a bank isn’t required to provide the borrower with an annual escrow analysis if the loan is more than 30 days overdue. My question is this: If the borrower is more than 30 days past due when the annual analysis is done, and there is an overage, can we apply that overage to the past due loan payment? I can’t find any mention of it in RESPA.
RESPA does not authorize you take money from the escrow and apply it for other purposes. The customer’s money in the escrow account is placed there for a very specific purpose, such as paying taxes or insurance. If there is an overage, a short cycle statement can be run to determine the exact amount of the escrow, then the surplus must be sent to the customer (check or credit to a deposit account). Then, if the customer chooses, they could apply the surplus to resolve the past due status.
An annual escrow analysis is a review of the amounts collected and disbursed from an escrow account for mortgage payments, property taxes, and insurance. This analysis determines if there is a shortage or surplus in the account, which may result in a change in the monthly payment amount. If a homeowner has a past due loan, it means they have missed one or more payments, which can result in late fees, a negative impact on their credit score, and potential foreclosure proceedings. It’s important for homeowners to stay current on their loan payments and work with their lender to address any financial difficulties they may be facing.