To begin using LoanPro’s escrow features, you’ll first want to set configurations for your entire tenant. The steps outlined in this article explain how to make broad changes to your escrow settings that apply to all of your accounts. Some steps will help organize your escrow collections and others allow you to define default actions. Smaller, more specific settings are changed at the account level and are outlined in this article. 

Escrow buckets

Escrow accounts or ‘buckets’ are a way to organize collected escrow payments to ensure they are allocated correctly. Each bucket has default settings like sales tax or interest accrual that can be configured according to your process. Buckets are available for use on all accounts within your tenant.

To view or edit buckets, navigate to Settings > Loan > Escrow > Buckets. Existing buckets can be edited by clicking the pencil icon, or to create a new bucket click ‘Add’. 

Each new bucket requires a title, enter one into the ‘Title’ field. The remaining fields will be set to the system defaults. Review each field and ensure they reflect the settings you desire for this bucket. For a description of each field, expand the section below. 

LoanPro’s Escrow Analysis tool performs a periodic audit of escrow funds received to determine whether funds collected into escrow accounts will be sufficient to fulfill estimated escrow disbursements (payments made from escrow). If you would like to use the analysis feature, you must complete the analysis configuration, which is outlined in the next section. If you do not wish to enable analysis for this bucket, click ‘Save’ to complete the creation of the bucket.

Analysis configurations

To enable escrow analysis on a bucket and begin configuring the settings, set the ‘Escrow Analysis Enabled’ field to “yes”. This will populate the Analysis Configuration section which includes four sub-sections: Analysis, Deficiency, Shortage, and Surplus. 

Analysis

The following settings should be set on this page:

• Cushion – Choose whether the cushion amount for this escrow bucket should be a fixed amount or based on a percentage of the anticipated disbursement.
• Fixed Amount – If 'Fixed Amount' was selected for cushion, enter the fixed amount in this field.
• Escrow Computation Year Start Date – Enter the start date for the computation year used for escrow analysis.
• Next Escrow Analysis Date – Enter the next date on which escrow analysis should be performed.

Deficiency Settings

The Deficiency settings let you decide how LoanPro should identify and deal with an escrow deficiency (less than $0.00 in the account).

The top section lets you specify items related to an escrow deficiency including:

• Deficiency Delimiting DPD – The number of days past due the escrow account can be before it is considered deficient.
• Deficiency Days To Pay – The number of days the customer will have to remedy the deficiency.
• Deficiency Catch Up Payment Number – The number of payments for which the escrow amount will be increased in order to remedy the deficiency.
• Deficiency Delimiting Amount – Tell the system how to decide how much the escrow account cushion should be before it will be considered deficient. The options include:
  • Fixed Amount – The dollar amount of the cushion. Any amount less than this will mean the account is considered deficient.
  • Percentage – This is the percentage of the yearly disbursement that the cushion should equal. Anything less than this and the account is considered deficient.

Deficiency Actions determine what the system should do in each situation listed (e.g. If the deficiency is less than: $0.00 & loan is less than 30 days past due). Click the circle next to the action you wish to select.

Shortage

An escrow shortage occurs when the bucket amount falls below the cushion amount, but is still greater than $0.00. This section allows you to define your shortage parameters. The options in this section are similar to the options available in the deficiency section.

Shortage Actions

The shortage actions section is dynamic meaning its values will change when you change the values in the Shortage settings section. In this section, you can set actions for what the system should in the instance of a shortage.

Surplus

A surplus 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. This section allows you to determine your criteria for an allowed account surplus.

Surplus Actions

The surplus actions section is also dynamic so its values will change when you change the values in the Surplus Settings section. In this section, you can set actions for what the system should do in the instance of a surplus.

Once you have set your desired analysis settings, click ‘Save’. Now the bucket will be available for use across the tenant.

Transaction Categories

To help organize and track escrow transactions, custom categories can be created within a tenant and used on any account that uses the escrow function. To create or edit categories, navigate to Settings > Loan > Escrow > Transaction Categories inside your company account.

Click the pencil icon to edit an existing category or click ‘Add’ to create a new one. Enter a name for the category in the field provided.

Vendors

Vendors are another customizable tool that can be used to organize escrow transactions. Within LoanPro you can track the people or companies you are sending payments to. Once the vendors are created, they can be used on all accounts within the tenant. 

Create a new vendor

Navigate to Settings > Loan > Escrow > Vendors. Here you’ll see a list of any existing vendors for the tenant. To edit a current vendor, click the pencil icon. To create a new vendor click ‘Add’. 

In the new window, fill out any information you would like to include on the vendor’s profile. The following fields are available to track vendor information:

Once you have entered the information for the new vendor, click 'Save'.