Posted by JerryhFL on 6/27/09 5:23pm
Msg #293820

Escrow Account - Any Limits

I have seen several HUD settlement statements, some of which have upfront of 9 to 12 months for taxes and insurance to be put into escrow. Others I have seen are for only a few months. They seem to run all over the place.

Are there any federal or state laws that govern the number of months the lender can "confiscate" to put into escrow. We all know it is a way the lender can generate additional profits by using your money to loan out at a pretty good rate of return.

Just curious.

Reply by PAW on 6/27/09 5:33pm
Msg #293821

Yes, Jerry, there really is a method to their madness.

Depending on when the insurance is due, is what the escrow is based on. When figuring it out, there needs to be enough in the account to cover the expected payment, plus 2 months. The same for taxes. In Florida, taxes are 'due' in November, so if the closing is today (June), there would need to be 6 months plus a cushion of 2 months (a total of 8 months) of escrow placed in the account. The payments would then make up the other 6 months over time.

Look closely at the "Aggregate Adjustment", then read the KB article about it. (http://www.pawnotary.com/kb/2-2.html)

Reply by GWest on 6/27/09 5:39pm
Msg #293822

The amount collect upfront depends on when the borrowers taxes and insurance are due next. They want to have enough in the account to pay the taxes and insurance when they are due together with a cushion.
In Calif. taxes are due in November 1st (delinquent by 12/10) and February 1st (delinquent by 4/10). Depending on when escrow is closed, there must be enough in the impound account to pay taxes when due.
Also, lenders usually require at least 3 months (some require 6 months) insurance to be paid at close, but will need to have enough in the impound account to pay 1 years premium when next due.

Reply by Becca_FL on 6/28/09 6:26am
Msg #293849

Let's hear it for XYZ certification!?

How is it that you have closed hundreds of loans, but do not know how escrows are calculated? I guess an NSA that doesn't know how to go over a HUD is only worth $75-$90 for edocs...maybe that's why SSs justify meager fees. I swear, I'm going to start a new page on my website called "Why NOT to use "Certified" NSAs and fill the page with stupid questions asked by "certified" NSAs. Way to go XYZ...NOT! Unreal.

Reply by docs1954CA on 6/28/09 10:00am
Msg #293857

Nothing like a good slam to start off a Sunday....

Geeeez,, He asked if there was a law regarding impound limits, not how to calculate them.Does everyone go over every line item on the HUD at the closing? I don't, they can do that on their own time and ask questions later. Someone got up on the wrong side of the bed.......

Reply by Dennis_IN on 6/28/09 10:34am
Msg #293858

Re: Nothing like a good slam to start off a Sunday....

I have to agree with Becca on this one. Knowing how escrows are calculated is (should be) common knowledge by a notary closing a loan. I can't imagine someone that has closed 100's of loans has to ask this question.

Reply by docs1954CA on 6/28/09 10:38am
Msg #293859

I see the question as having a yes or no answer....

Did I miss something? he asked if there was a law governing limits on impounds....not how to calculate them...

Reply by Dennis_IN on 6/28/09 10:56am
Msg #293861

Re: I see the question as having a yes or no answer....

My point was in reference his ignorance in how escrow accounts are set up. If you read the post this is evident. If he had just asked the question without the comments we would not be having this conversation.

Reply by docs1954CA on 6/28/09 11:17am
Msg #293864

Re: I see the question as having a yes or no answer....

Dennis, I agree with you on that part, but he didn't ask what an escrow account was, or even mention what state the property was in for the closing.Too many variables to account for.

Reply by Becca_FL on 6/28/09 12:29pm
Msg #293868

He said...

"I have seen several HUD settlement statements, some of which have upfront of 9 to 12 months for taxes and insurance to be put into escrow. Others I have seen are for only a few months. They seem to run all over the place."

Which leads me to believe that he hasn't got a clue of how escrows are calculated. How many times have you had a borrower flip out over closing cost because they are higher then estimated only to discover that the difference is because of the escrows? If you have to call the EO or LO for something like this, you need to find another line of business, IMO. I just think this is an embarrassment to my profession.

Reply by docs1954CA on 6/28/09 2:28pm
Msg #293876

Re: He said...

Yes, that's what he said. I agree. That was the stated observation he made regarding escrow.He didn't say whether he tried to calculate and explain the situation.His question centered on the legal question of maximums:

"Are there any federal or state laws that govern the number of months the lender can "confiscate" to put into escrow. We all know it is a way the lender can generate additional profits by using your money to loan out at a pretty good rate of return."

I won't get into the XYZ issue other then to say not all "certified" Notaries are idiots.

Reply by Maureen_nh on 6/28/09 5:04pm
Msg #293886

Re: He said...

I am going to get raked over the coals for this but, while I do point out that the reason the closing costs are higher than expected are because of escrow and show them where they are on the HUD (why do countless LOs seem to forget them) there is no way that I am going to speak for the title companies on how or why they reached these figures.
And yes the figures are all over the place, some want 2 months some want up to 9. The same state, same week. Is it my job to dig through the docs to find out that sometimes existing escrows are being used in the loan or one title co has different requirements than another and then to speak for them as if I were the definative authority?
Do you folks tell the Jones that their interest is higher than the neighbors because their credit score isn't as good or they missed a good rate by one day?
I do not do numbers, I do docs.

Reply by Shoshana Roller on 6/28/09 5:22pm
Msg #293890

I totally agree with you, Maureen n/m

Reply by Lee/AR on 6/28/09 5:37pm
Msg #293894

Me, too... docs, not numbers. n/m

Reply by Lee/AR on 6/28/09 5:37pm
Msg #293895

Me, too... docs, not numbers. n/m

Reply by Pat/IL on 6/28/09 10:42pm
Msg #293911

How the title company reached the figures

The title company reached the figures by reading the lender's closing instructions. I'm not trying to be smart or anything, but signing agents can learn a lot by reading the closing instructions now and then, if the signing agent is the curious type. I think the curious signing agents make better signing agents.

Reply by NC_Closer on 6/29/09 11:03am
Msg #293937

Re: He said...

Too bad there isn't a better method to distinguish "experienced" NSAs from "truly qualified ones"...... The frustrating part (for me as both an NSA and an employee of a SS) is that everyone can be listed on the same site with the same stated creditials, can talk the same talk when contacted about an assignment. And then you have suggestions that a lender is charging whatever they want in escrows just so they can make as much interest as they can????

Would love to share an example of such frustration from EOM closing last week. I'm just not sure if anyone is interested.

Reply by sue_pa on 6/29/09 11:39am
Msg #293946

no they don't talk the same talk

... is that everyone can be listed on the same site with the same stated creditials, can talk the same talk when contacted about an assignment. ...

If YOU spend your time interviewing people prior to needing someone in an area, you will know the difference ... if not, YOU should not be hiring people.

That said, you basically said last week you pay $100 (you did some quick back peddling when it was suggested you aren't paying for "experience" as you state with your 50+% error rate) you also get what you pay for ... in my case, and I do have experience. If I take a $50 order (I have one today) they will not get anything from me other than a loan package that has names "signed as typed". If there is ANY type issue it won't be worked out on my time/dime. My next appt. after that one is paying me $175. If I see any type issues or problems prior to, during or after the closing you can be assured my client will know right away.

Some companies want a "closer" ... some want a "certified signing agent" (insert whatever terms you want for the differences) ... what they are willing to pay makes all the difference in the world and YOU should be able to figure out the difference during a phone interview and perhaps some reference checking.

Reply by NC_Closer on 6/29/09 2:19pm
Msg #293970

Re: no they don't talk the same talk

Sue,

Until YOU actually hire someone to close a loan then YOU don't have any right WHATSOEVER to comment on that topic. Just how many signing agents have YOU interviewed? At month end, when everyone you've ever worked with is booked, do YOU suggest that I tell the client that their loan is NOT going to be closed?? And YES, SUE, without having the luxury of a complete oral and written exam, and or course, a REFERERNCE/RATING by other agencies who may have used a NSA in the past, then you make a quick decision based on a few basic questions. And yes SUE, people can certainly talk to the talk.

Speaking as a professional signing agent, and stating the point ONCE AGAIN, YOU and the rest of US are listed equally with signing agents who are not equal. Let's stick to the topic SUE.

Reply by NC_Closer on 6/29/09 3:09pm
Msg #293974

Re: no they don't talk the same talk

One last note topic... See Sue, that's where you and I differ. REGARDLESS of the fee of the assignment, if I ACCEPT it then they will get quality service from me. EVERY SINGLE TIME. I'm quite sure the majority of the NSAs on this and all other sites agree with me on this one!

Reply by Maureen_nh on 6/29/09 10:29pm
Msg #294004

Re: He said...

I have told borrowers countless times that I know exactly what the problem is and do try to explain it to them BUT I am not authorized to discuss how those thousands (at times ) of dollars of figures are reached. That is NOT my job.
The borrowers SHOULD know this before I get there. If not, I do a little dog and pony show and if they are still not happy "call your LO or the settlement/title co."
They, not I, are the ones that that should be giving you the answers to your questions.

Reply by MW/VA on 6/28/09 5:11pm
Msg #293887

He asked a question & Paul answered it. Regardless if someone is "certified" or not, does not make them totally knowledgeable of mortgage loan details. We aren't loan officers, originators, processors, etc. We are trained to get docs signed, not necessarily understand every detail.

Reply by Becca_FL on 6/28/09 6:13pm
Msg #293898

And this is why rescission calendars are printed...

because some NSAs can't count to three skipping Sunday and Holidays. God forbid they learn to count to twelve. Maybe someone out there in NotRot land with time on their hands can draw up a monthly escrow calendar for those that can't count to twelve.

Reply by Pat/IL on 6/28/09 10:37pm
Msg #293910

Jerry - See HUD's website.

http://www.hud.gov/offices/hsg/ramh/res/respafaq.cfm

Reply by Robert/FL on 6/29/09 1:36pm
Msg #293964

Re: And this is why rescission calendars are printed...

Well thank goodness we have notaries like you who know absolutely everything there is to know! The rest of us are just dumbies!

Reply by MikeC/NY on 6/29/09 6:03pm
Msg #293986

Re: And this is why rescission calendars are printed...

Becca, we don't really need to know about escrow requirements - it's not part of the job, and explaining to the BO why their escrow is so high may actually cross that thin line between explaining the law in general terms and applying the law to a specific situation.

If you know the reason, that's great - it's a bonus, not a requirement. I understand what the rules are in my area, but there's no way I'm ever going to tell a BO that "your escrow is higher than you thought it would be because..." I don't need the liability, and I don't want some ticked-off LO threatening to sue me when a deal goes south because I offered an "opinion." If the BO has a question about escrow, the only thing I will tell them is to call their LO.

I think you jumped the gun too quickly by taking him to task for asking a question about something he really had no reason to know. I think it's great that he asked - at least he's trying to learn.

Reply by Becca_FL on 6/30/09 10:17am
Msg #294032

No reason to know, Mike??? Not part of the job???

I'm sorry, that's just BS and you should know it. An NSA that can't or won't review a HUD with the brw is not doing their job...period! Legal advice???? Since when is saying "your taxes are due in Nov, your first payment is due in Aug, so to have enough money in your escrow account to pay your taxes in Nov the lender has to collect 10 months of escrows for taxes in advance." Factual, yes. Legal advice??? Get real.

Clearly, there are MANY bad NSAs out there doing a piss poor job and it's those crappy NSAs that give the attys all the ammo they need to fight for atty only closings.

Reply by MikeC/NY on 6/30/09 4:45pm
Msg #294090

Re: No reason to know, Mike??? Not part of the job???

I have to disagree with you here. Maybe that's the way you approach it, but anyone who doesn't do it that way is neither wrong, sloppy, nor incompetent. Explaining why ANY number is what it is on the HUD is not part of the NSA's job.

I never review the HUD with the borrower - I wasn't hired to do that and I don't know the details of the loan. My approach is to hand them the HUD, point out the various sections, and ask them to review it and make sure it agrees with what they were told. While they do that, I'm filling out my journal. If they have a question about what a certain line item represents, I can tell them; if they want to know why it is what it is, that's above my pay grade.

If they're OK with the numbers on the HUD, we're good to go; if not, we get the LO on the phone.

I describe the documents so the BOs understand what it is they're signing; I don't explain the numbers to them. If you want to explain to them why the numbers are what they are, knock yourself out - you may or may not be adding value to your services. I just don't think you should be condemning others who don't work the way you do.

Reply by JanetK_CA on 7/1/09 3:25am
Msg #294150

Re: No reason to know, Mike??? Not part of the job???

I sure wish I knew how many signings I've done that would have gone south if I hadn't helped a borrower understand what's on their HUD. I'd say that 65 - 75% of the time the LO isn't available. When the borrower says "Why are my fees so high?" when they're looking at the total at the bottom of the page, I don't think we need to explain to them precisely how the numbers are calculated or get into interpretations of things, but I do think, at minimum, we need to be able to make them aware of some things that might not have been included in the number they were quoted by their LO (like funding an impound or partial-month interest, etc). There is usually a fairly simple explanation -- to someone with a good understanding of the basics.

If we aren't prepared to do that, there would be lots of situations where a lack of understanding on the borrower's part could unnecessarily result in a no-sign. But walk them through just a few basics and you end up with a completed signing. Naturally, there are some things I won't get into regardless, and others that I prefer be handled by the LO or broker, if they can be reached. But I think most people expect to have someone at their table who can at least help them find the answers to most of the questions that come up.

I think this is where experience becomes valuable and makes some of us worth more than point-and-sign notaries. Frankly, though, I think some of the differences between what you and Becca are saying have as much to do with how you interpret each others comments as they do with how you handle things at the table. But I'm just sayin'...