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Annual Escrow Analysis- 13 Month Cycle?

Answered by: 
David A. Dickinson

Question: 
We normally perform escrow analysis annually each year in January on all our escrowed loans. It is now February and we realized this was not done. Doing the analysis now, a month later - will this affect anything adversely? We usually give the customers notice 60 days before changing their payments which was usually in March. Assuming we need to wait now until April. Will this affect them in anyway having a 13 month cycle now versus what would normally be a 12 month analysis time frame? And then next year should we keep the analysis in Feb or go back to January which would result in a short 11 month cycle next year?
Answer: 

You have a 90 day window to do your escrow analysis.
For each escrow account, a servicer shall submit an annual escrow account statement to the borrower within 30 days of the completion of the escrow account computation year. The servicer shall also submit to the borrower the previous year's projection or initial escrow account statement. The servicer shall conduct an escrow account analysis before submitting an annual escrow account statement to the borrower. [§1024.17(i)]

In preparing the statement, the servicer may assume scheduled payments and disbursements will be made for the final 2 months of the escrow account computation year. [§1024.17(i)(1)]

As long as you complete your annual analysis by the end of February, you're okay.

First published on 06/27/2021

Filed under: 
Lending
Filed under lending as: 
Escrow
RESPA

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