If the note does not specify the right, are we permitted to add an escrow account to an existing loan at the time of a loan modification request, regardless of whether the request is approved, denied or withdrawn?

Does a default loan status have any bearing on whether we can add the escrow account?

If your loan documents do not address the issue then you need to be talking to your attorney to explore your options.

But in a layman's opinion the modification scenario does not give you the option to force the establishment of an escrow account, especially if the request is denied or withdrawn.

Agree with Dan (as usual) - talk to your legal department.

Our Special Assets department has done some creative financing to work with borrowers (although this is outside of my expertise). Maybe they have set them up, but I assume it would be under a written agreement with the borrower.

Contact the head of your special assets department and discuss with legal.

Best of luck.