Bulletin: NL000048
Dear Associates:
NEW ESCROW ACCOUNT PROCEDURES
A series of new RESPA regulations apply to loans closed on or after May 24, 1995. These regulations relate to "escrow accounting items" such as real estate taxes, hazard insurance, mortgage insurance, credit life insurance, and assessments if ...
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THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.
(EXAMPLE OF AGGREGATE ANALYSIS)
ASSUMPTIONS
Disbursements
$1,200 for school taxes (to be) disbursed October 20.
$2,400 for county taxes (to be) disbursed December 10.
$600.00 for hazard insurance (to be) disbursed next May 1.
Cushion: one-sixth of estimated annual disbursements.
Closing: May 15
First Payment: July 1
Single Item deposits: line 1001 (hazard insurance) three month at $50 a month
= $ 150
line 1004 (county taxes eight months at $200 a month =
$1,600
line 1006 (school taxes) ten months at $100 a month =
$1,000
Step 1
Initial Trial Balance
| Payment | Disbursment | Balance | |
| June | 0 | 0 | 0 |
| July | $350 | 0 | $350 |
| Aug. | $350 | 0 | $700 |
| Sept. | $350 | 0 | $1,050 |
| Oct. | $350 | $1,200 | $200 |
| Nov. | $350 | 0 | $550 |
| Dec. | $350 | $2,400 | $1,500 (low est. bal.) |
| Jan. | $350 | 0 | -$1,150 |
| Feb. | $350 | 0 | -$800 |
| Mar. | $350 | 0 | -$450 |
| April | $350 | 0 | -$100 |
| May | $350 | $600 | -$350 |
| June | $350 | 0 | 0 |
Step 2
Increase Balance to Elimate Negative Balance
| Payment | Disbursment | Balance | |
| June | 0 | 0 | $1,500 |
| July | $350 | 0 | $1,850 |
| Aug. | $350 | 0 | $2,200 |
| Sept. | $350 | 0 | $2,550 |
| Oct. | $350 | $1,200 | $1,700 |
| Nov. | $350 | 0 | $2,050 |
| Dec. | $350 | $2,400 | 0 |
| Jan. | $350 | 0 | $350 |
| Feb. | $350 | 0 | $700 |
| Mar. | $350 | 0 | $1,050 |
| April | $350 | 0 | $1,400 |
| May | $350 | $600 | $1,150 |
| June | $350 | 0 | $1,500 |
Step 3
Balance With a 2-month Cushion
| Payment | Disbursment | Balance | |
| June | 0 | 0 | $2,200 (actual) |
| July | $350 | 0 | $2,550 |
| Aug. | $350 | 0 | $2,900 |
| Sept. | $350 | 0 | $3,250 |
| Oct. | $350 | $1,200 | $2,400 |
| Nov. | $350 | 0 | $2,750 |
| Dec. | $350 | $2,400 | $700 |
| Jan. | $350 | 0 | $1,050 |
| Feb. | $350 | 0 | $1,400 |
| Mar. | $350 | 0 | $1,750 |
| April | $350 | 0 | $2,100 |
| May | $350 | $600 | $1,850 |
| June | $350 | 0 | $$2,200 |
| Aggregate Initial Balance | $2,200 | ||
Result
| Line 1001- | $150 |
| Line 1004- | $1,600 |
| Line 1006- | $1,000 |
The total is $2,750 for individual itemized deposit. The difference between this amount and the aggregate analysis initial balance is $550. On line 1008 the servicer would instruct the settlement agent to put -$550.
EXHIBIT 2
AGGREGATE ADJUSTMENTS
| June | $130 | 0 | $130 |
| July | $130 | 0 | $260 |
| Aug. | $130 | 0 | $390 |
| Sept. | $130 | $360 | $160 |
| Oct. | $130 | 0 | $290 |
| Nov. | $130 | 0 | $420 |
| Dec. | $130 | $1,200 | -$650 ($650 + $260 (2 mo.) = $910) |
| Jan. | $130 | 0 | -$520 |
| Feb. | $130 | 0 | -$390 |
| Mar. | $130 | 0 | -$260 |
| April | $130 | 0 | -$130 |
| May | $130 | 0 | 0 |