---
title: Escrow Account Short-Year Statements
description: Learn how escrow accounts work and why short-year statements are important. Discover how lenders can deal with changes and projections in the escrow account computation year. Guidance for Bankers.
---

[Banker's Compliance Consulting Blog ](https://blog.bankerscompliance.com/en)

# [Escrow Account Short-Year Statements](https://blog.bankerscompliance.com/en/escrow-account-short-year-statements)

 Written by [Jerod Moyer](https://blog.bankerscompliance.com/en/author/jerod-moyer) | Feb 9, 2024 4:58:17 PM

Escrow accounts are based on a 12-month period referred to as the escrow account computation year. Lenders are required to provide an initial escrow statement at closing (or when the account is established) that reflects all the anticipated inflows and outflows to that escrow account. As we all know, plans can change and that is where a short-year statement can be helpful. For example, if there is an unanticipated change in the tax or insurance premiums that will cause a surplus, shortage or even a deficiency, the lender could just let it ride until it’s time for the annual analysis. However, if the lender wants to deal with it sooner, they can by conducting a short-year analysis/statement. A short-year statement effectively ends one escrow account computation year and starts another one. There are other reasons short-year statements are utilized as well.

Jerod explains more in the video.

Video Highlights:

- The [escrow](https://www.consumerfinance.gov/rules-policy/regulations/1024/17/) account computation year must not exceed 12 months.
- An escrow account can be reanalyzed and reset at any time during the escrow account computation year.
- Short-year statements provide borrowers information on the prior year’s projected activity, a history of what actually happened in the account and a projection for the new escrow account computation year.

Published  
2024/02/09

 

[View full post](https://blog.bankerscompliance.com/en/escrow-account-short-year-statements)

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