A Different Kind of Escrow – Part 2
In my previous blog, “A Different Kind of Escrow”, I discussed how loan proceeds may be held in a short term escrow account if construction/improvements cannot move forward due to inclement weather. The context of the blog was to emphasize that those monies are not subject to RESPA’s escrow rules found in 3500.17 (i.e. initial deposits on GFE, account analysis, the 900 section of the HUD Settlement Statement, etc.)
It also stated, “The escrow funds are not considered “settlement charges” and therefore, should not be disclosed on the GFE or the Settlement Statement.” I felt it necessary to clarify this sentence a little further. As stated before, the funds for these types of escrows would not go on the GFE. However, they should appear on the first page of the HUD-1 Settlement Statement (in the 100 or 400 series), depending on who is funding the account (i.e. borrower/seller) or the type of transaction (i.e. home improvement/purchase). Please note that HUD 1-A Settlement Statements do not have a 100 series and therefore a HUD-1 would need to be utilized for non-purchase transactions.
Published
2011/01/21
David Dickinson
David’s banking career began as a field examiner for the FDIC in 1990. He later became a Compliance Officer and Loan Officer for a small bank. In 1993, he established Banker’s Compliance Consulting. Along with his amazingly talented Team, he has written numerous compliance articles for prestigious banking publications and has developed compliance seminars that Banker’s Compliance Consulting produces.
He is an expert in compliance regulations. He is also a motivational speaker and innovative educator. His quick wit and sense of humor transforms the usually tiring topic of compliance into an enjoyable educational experience. David is on the faculty of the American Bankers Association National Compliance Schools and has served on the faculty of the Center for Financial Training for many years. He also is a frequent speaker at the ABA’s Regulatory Compliance Conference. He is also a trainer for hundreds of webinars, is a Certified Regulatory Compliance Manager (CRCM) and has been a BankersOnline Guru for many years. The American Bankers Association honored David with their Distinguished Service Award in 2016.
David and his wife Karen have three adult children, four grandchildren (none of whom live at home!) and two cats (of which Dave is allergic … the cats, not the children!). They recently moved to an acreage outside of Lincoln, Nebraska where he gets to play with his tractor. When possible David can be found fishing, making sawdust in his shop, or playing the guitar and piano. He also enjoys leading worship at his church.