One area that we will touch on is escrow accounts, specifically escrow account payoff statements. RESPA states …If a borrower pays off a mortgage loan during the escrow account computation year, the servicer shall submit a short year statement to the borrower within 60 days after receiving the pay-off funds. The escrow account payoff statement effectively closes out the escrow account and while you have 60 days to issue the statement to the borrower, you only have 20 days (excluding Saturdays, Sundays and legal public holidays) to refund any remaining escrow balance. Our recommendation is that you issue both the escrow payoff statement and the refund within 20 days. Not only will it save you an extra step, but it may also help eliminate borrower confusion.
Keep in mind too, that you have a couple of options for “refunding” any remaining escrow balances. You could issue a check, net it from the payoff amount or use it to fund a new escrow account. Some of these options require the borrower’s permission and some don’t.
Jerod explains more in the video.
Published
2025/01/27
