[Anonymous]

Good Morning,
I can’t find anything specific on this……if we have multiple properties securing a loan, is the calculation of estimated taxes, insurance & assessments supposed to include both properties or just the primary property (such as in a purchase transaction)? Also, what should be done where the second property securing the loan will be a 2nd mortgage and the taxes and insurance were escrowed in the 1st mortgage?
Thanks!

Topic

[jholzknecht]

Great question. First, when you have multiple properties securing the loan, you identify all properties in Section 1026.37(a)(6). In the projected payments – Estimated Taxes, Insurance and Assessments area you would generally show the total amounts due on each property. If one property is escrowed in connection with another loan the amounts would not be showed in the escrow line for the payment calculation but would be shown in the Estimated Taxes, Insurance and Assessments section. For the In Escrow? question indicate “Some”.

[Anonymous]

Another question……….where there are multiple properties would we include the insurance premiums for both properties in the prepaid section? We have a request where the applicant is purchasing a new home but also securing the loan with their current home.

Thanks!

[jholzknecht]

The “Prepaids” include amounts to be paid by the consumer in advance of the first payment. I suspect that the consumer has already paid the insurance premiums for the current home. If not and the consumer is expected to pay those premiums as part of the current transaction then the amounts would be reflected in prepaids.

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