Escrow Options

We advocates an escrow account for the payment of taxes and insurance, particularly for borrowers with blemished credit histories or first-time homeowners.

Definition:

• Escrow Accounts are funds held by the Servicer in an account for the payment of the Borrower’s real estate taxes, Insurance premiums (homeowner’s, flood and mortgage insurance, special assessments, ground rent, etc..

• Loan Servicer refers to the entity responsible for the administrative aspects of a loan from the time the proceeds are dispersed until the loan is paid off.

• Agency refers to either Federal National Mortgage Association (FNMA) or Federal Home Loan Corporation (Freddie Mac).

• Loan to Value (LTV) is calculated by dividing the base loan amount by the lesser of the appraised value or sales price (as applicable).

• Requirements: Initial Escrow accounts for the payment of real estate taxes, insurance premiums, special assessments, ground etc. are required according to State Law and in the following circumstances:

  • Loans where all Borrowers are First Time Homebuyer’s

  • When the LTV exceeds 80.00%

  • Refinance transaction where the current taxes and insurance premiums are past due

  • Mortgages where the Borrower have less than 3 months reserves after Closing

• Notes:

  • Hazard/Flood insurance escrows are not required on condos with sufficient acceptable master hazard/flood policies.

  • For Non-Agency/Jumbo transaction, whether or not the Underwriting is Delegated, follow the individual investor requirements

  • Partial escrow waivers permitted (may only waive Hazard Insurance, (Flood & Taxes always have to be escrowed))

  • Flood Insurance must ALWAYS be escrowed

• Ineligible Financing Types
  Escrow account waivers are not permitted when using FHA, VA or USDA financing