Re: Escrow


Part 1

I’m going to assume that you are also talking about a Higher Priced Mortgage Loan (HPML) aka Section 35. HPMLs that are secured by 1st lien on a principal dwelling are required to have Escrow accounts. In this case you only have the land as collateral, thus you don’t meet the requirements of having to have an Escrow account.

Part 2

Sinc you don’t have to have an Escrow account, I’m going to guess this is a mute point but I’ll still attempt to address it. If you set up an Escrow account after the loan is opened you will need t do an Escrow Analysis. In doing the Escrow Analysis you’ll determine what money your borrower will need to give you up front to meet the payment obligations. See Section 3500.17(c)(2) of RESPA.