Aggregate Escrow Account

Use the Aggregate Escrow Account form to estimate the activity in the borrower's escrow account for the coming year based on anticipated payments from that account. This information is used to generate the initial escrow account disclosure statement (HUD1-ES).

There are three basic steps to create an aggregate escrow account schedule.

  • Depending on the version of the forms being used for the loan, complete the monthly fee information in section 1000 of the GFE - Itemization, 2010 Itemization, or 2015 Itemization form.

  • Establish a minimum escrow balance (cushion) and payment schedule using the Initial Escrow Account Setup dialog box.

  • Display the payment schedule and dollar amounts on the Aggregate Escrow Account form.

To Create Initial Escrow Account Information:

  1. From your Pipeline, open a conventional-type loan.

  2. Click the Forms tab, and then click Aggregate Escrow Account.

  3. Click the Address Book icon to select a service provider from your business contacts. You can also type service provider information and optionally right-click to add a new contact to your business contacts.

  4. Make sure the first loan payment date is recorded in the 1st Payment Date field.

    • Monthly and yearly payment information entered in the 2010 Itemization or 2015 Itemization form for taxes, insurance, and other fees that might be subject to escrow are listed in the table below the field.

    • If you are using the 2015 Itemization, the appropriate Escrowed checkboxes are selected based on information entered in the Fee Details window for each fee. The selections might be adjusted after you complete the setup process described below.

    • If you are using the 2010 Itemization, the appropriate Escrowed checkboxes are selected after you complete the setup process described below.

  5. Click the Setup button.

    • The Initial Escrow Account Setup window opens. Steps 6–10 refer to entries in this window.

  6. In the Cushion row, type the number of months under each fee column for which a payment is required. This will establish a minimum balance in the escrow account.

  7. For each fee column, type the number of months of payment required in the row in which the fee is due.

    • For example, if the borrower will pay School Tax in March and November, type a 6 in the March field and a 6 in the November field. This means that six months worth of School Taxes are due twice a year.

  8. To indicate that a payment is prepaid, right click the payment, and then click Prepaid.

    • Prepaid payments are included in the escrow disbursement figures, but adjustments for the prepaid amounts are made in the Starting Balance and Aggregate Escrow Adjustment fields.

  9. Select the Servicer to refund Mtg Ins Cushion upon termination checkbox at the bottom of the tool if the servicer will refund the upfront mortgage insurance payments when the mortgage insurance coverage is terminated. Calculations on the REGZ-TIL, Amortization Schedule and other applicable forms will be updated accordingly.

  10. When you finish creating the payment schedule, click OK.

  11. The Aggregate Escrow Account form displays with a complete payment schedule calculated.

    • The Starting Balance is the amount required to ensure that the value of the escrow account does not fall below zero (or the defined cushion) as disbursements are made. It is calculated based on the total dollars paid in and disbursed each month during the year.

    • The Single Line Analysis is a calculation of the amount required for each disbursement. It is calculated for each type of fee by determining how many additional months of payments are needed at the time of a disbursement for that fee. The value is greater than or equal to the Starting Balance value because the calculation is done for each type of fee, and does not consider overall payments made to the escrow account.

    • The Aggregate Escrow Adjustment is calculated by subtracting the Single Line Analysis value from the Starting Balance value. The result reduces the borrower's required cash to close.