Mortgage Servicing Escrow Accts Deficiencies Shortages Surpluses 11 – What can a servicer do if, during the course of the escrow account computation year, the amount of costs to be paid from the escrow account will decrease or increase…?

Compliance > Regulation X and Z - Servicing
Q:   What can a servicer do if, during the course of the escrow account computation year, the amount of costs to be paid from the escrow account will decrease or increase beyond the amounts anticipated from the escrow account analysis that was conducted before the annual escrow account statement was prepared?
 
A:   (UPDATED 6/2/2021): A servicer can conduct another escrow account analysis to confirm whether the change will result in a surplus, shortage, or deficiency. The servicer can then provide a short year escrow account statement to reset the escrow account computation year and inform the consumer what actions the servicer will take to address the surplus, shortage, or deficiency. 12 CFR § 1024.17(c)(3), (f) and (i)(4).
 
 
This Q&A was contained in the CFPB’s Mortgage Servicing FAQs – version 3, as of June 2, 2021 (which may be updated from time to time).  This may be found on the CFPB’s website here:  https://files.consumerfinance.gov/f/documents/cfpb_mortgage-servicing_frequently-asked-questions.pdf
 

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