We have a customer who has multiple loans on multiple properties. On two of the loans there is an escrow waiver in each file, but on one of the loans all three properties from the three different loans are escrowed together. The escrow is not required on any of the loans, but I believe the customer decided when doing the third loan that he wanted to go ahead and escrow all of them together.

What are the compliance or legal concerns with this? I think we need to correct them all, but I want a legal or compliance basis to cite.

Thanks

I'm not sure what your concern is?? What is to correct? They received the first two loans without escrow and started an escrow on the third loan.

Do the properties on loans one and two also secure loan three?

Randy, I think the OP is saying that the customer wants to roll the escrows for all three of the properties into one escrow on the third loan. So what they're asking is if there is anything to worry about when you're collecting escrows on properties that are not collateral on a loan.

Seems to me that it would be similar to what happens when a customer has a single insurance policy that covers a number of various properties. So I believe the question is can you escrow for the entire premium or can you only escrow for the portion of the bill that is allotted to the collateral property.

Not having come across this here, I'd have to do some research to find the answer.

Thanks Truffle Royale. That explains it better. I had never come across anything like this either. Any opinions would be appreciated.