Update Escrow Account Settings

General

LoanPro lets you create up to 25  escrow accounts or ‘buckets’ within your company account.  Each escrow bucket has its own group of settings that determine how it will behave in relation to the loan.  The escrow settings can be defaulted companywide when an  escrow bucket is created.  This article will cover updating the escrow settings within a loan account.

How To

To update the escrow settings for a specific escrow bucket, navigate to Loan Settings > Escrow within a loan account.

Click EDIT to edit the settings.  You have the following setup configurations:

Setup Configurations

Payment Application

This selection determines how much escrow will come due for this bucket with each payment.  The options are Standard, Next/Standard, Pro-rate, and Next.

Standard – Only the amount of escrow from the  escrow adjustment that applies to the current payment period will come due.

Next – The amount of escrow from the  escrow adjustment that applies to the current payment period and the following period will come due.

Next/Standard – If the loan is past due, it will work like the standard setting, if the loan is not past due, it will work like the Next setting.

Pro-rate – The escrow amount from the  escrow adjustment that applies to the current payment period will be prorated daily and the daily escrow amount including today’s will be due.

Example

Payoff

This selection determines how much escrow will be included in payoff.  The following options are available:

Full – All escrow that was scheduled to come due over the life of the loan as originally scheduled will be included in payoff.

None – No escrow will be included in payoff.

Standard – Only escrow to come due to this point will be included in payoff.

Standard + 1 Period – Escrow that has come due plus one payment period worth of escrow will be included in payoff.

Daily Straight Line – Escrow will be prorated daily and the daily amount of escrow through the payoff date will be included in payoff.

Include in APR

This option lets you choose whether to include escrow in the calculation of APR.  Including escrow will always make APR higher.

Include in Schedule

This option lets you choose to include the escrow in the payment schedule.  This does not affect the transactions report, but will change the payment amount in the payment schedule shown in the Loan Setup and will affect the payment schedule variable (used in custom forms, billing statements, etc.) output as well.

Add to Loan Amount in Disclosures

If this option is set to ‘Yes’, the total of the monthly adjustment amounts for this bucket will be included in the truth in lending (TIL) Disclosures by being incorporated into the Amount Financed. If this bucket is not set to be interest bearing, interest will not accrue on this balance and the effect will be to reduce the quoted APR.

Interest Bearing

The option to make an escrow bucket interest bearing will only be shown if escrow was set up in the  Escrow Calculator section of the Account Setup > Setup Terms Area. Escrow will accrue on the total outstanding escrow balance for a given escrow bucket.

Analysis Configurations

Cushion

This option allows you to select the Escrow Analysis Cushion type. The following options are available:

Fixed Amount – Allows you to set the cushion as a static amount, to be used every time an analysis occurs.

Percentage – Allows you to set the cushion as a percentage of anual disbursements.

Next Escrow Analysis Date

This is the date on which the next escrow analysis will occur.

Escrow Computation Year Start Date

Enter the escrow computation year start date here. This will usually be the first payment date on an account. This is the date that will be used in the computations of the escrow analysis.

Fixed Amount/Escrow Payments

Whether this field is Fixed Amount or Escrow Payments depends on the setting for Cushion. This field allows you to determine the amount of the Escrow Analysis Cushion. For Fixed Amount, you will be able to enter a fixed amount here. For Percentage, you will be able to select the amount of yearly escrow payments that will add up to make the cushion amount. For example, if there are 12 escrow payments scheduled to be made in a year, entering 6 as the Escrow Payments amount will give you a percentage of 50, because the cushion amount is then 50% of expected annual disbursements.

Note: For more information on how to use Escrow Analysis see  Escrow Analysis Overview

Deficiency Settings

Deficiency Actions

Shortage Settings

This section allows you to select your criteria for an account shortage. A shortage usually occurs when it is found that the amount of money in this escrow account at its lowest point will be less than the selected cushion amount but still greater than $0.00. However, this section allows you to customize the account shortage settings.

Shortage Actions

Surplus Settings

This section allows you to select your criteria for an allowed account surplus. A surplus usually occurs when it is found that the amount of money in this escrow account at its lowest point will still exceed the selected cushion amount. However, this section allows you to customize the account allowable surplus settings.

Surplus Actions

Make the selections you want for each of the options.  Click   to save your settings.  You are done!

For more information on available escrow settings within your company call our support line: (800) 559-4776, or send an email to support@simnang.com.


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