What is the difference between paying escrow disbursements through Approve to Pay (03.12.06), Select to Pay (03.12.09), and Update/Checks (03.12.10) or simply using Transaction Codes 51-59 in the Payment Entry (03.02)? When taxes or insurance (or any escrow types 1-9) are paid through the escrow menu options, Approve to Pay, Select to Pay, and Update/Checks, the Escrow Record (03.12.02) or (03.23.03) is automatically updated. Fields E-05 and E-06 are updated with the correct amount last paid. When analysis is processed, the program uses this information to determine overages, shortages, and new constant. This process should be used even if checks are not printed from the MC system. Although we recommend printing checks on MC, it is possible to keep the data current on MC and print checks on another system or manually. Simply print the Update/Checks (03.12.10) to paper, and then type manually or print checks from another system. When escrow disbursements are paid manually through Payment Entry (03.02) using Transaction Codes 51-59, fields E-05 and E-06 are not automatically updated with the correct dollar amount and date to pay next. When analysis is done on these accounts, the program recognizes the account as past due date in E-06 not updated), creates a deficit, and increases the constant for the next year. Using the correct method to pay escrow disbursements keeps the operator from having to make manual changes to the Escrow Record. After I paid the insurance premium on an account, I received notice from the insurance company that the premium had gone up and there was a shortage. What is the correct way to disburse this additional premium amount to cover the annual premium? When going into the Approve to Pay (03.12.06) and the program asks ADDITIONAL PREMIUM: <Y-N>, select <Y>. Using this option, the program will add this amount to the last disbursement and not recognize it as another installment. The next escrow due date will not be moved forward. When analysis is done, the entire amount will be treated as one annual disbursement and not two installments. The Escrow Record will be updated accordingly. How many escrow clerks do I need using the MC Escrow program? One clerk can handle at least 4,000 escrow accounts. This includes the paying of taxes, fire insurance, MIP and other escrows. Using an organized method and Mortgage Computer's automated program, it becomes very easy to reach a goal of 4,000 escrow accounts or more per employee. The escrow constant is not included in the total payment. Why? There was no dollar amount set up or you entered a 0 HOW PAID, which tells the program this escrow is a tickler (meaning you are not collecting any funds). Therefore, the escrow constant is not included for total payment. I do not pay the escrow bills; the borrower does. Why should I set up an escrow account? Your job is to protect the security. If the taxes are not paid, the property can be taken away. If there is no fire insurance and the improvement burns down, you lose your security. Therefore, every loan should have two escrows, one for taxes and one for fire insurance, even if you do not pay the bills. The escrows can be used as ticklers to be sure the taxes and fire insurance are being paid. Can the escrows account go negative? Yes. Sometimes it becomes necessary to pay the bills to protect the property before all the funds are collected. At other times, you may not be required to pay the bills unless the funds are collected. You indicate if the program is allowed to advance funds and go negative by entering a Y or an N in E-07 NEGATIVE. What should I enter in Field E-02 Tax/ID Number? This field is used to help identify the escrow. For a tax escrow, enter the tax parcel number. For a fire insurance escrow, enter the policy number. When set up this way, you can search for loans by policy number or tax parcel number from the Index screen. Can I set up more than one tax escrow? I have more than one property. Yes. Set them up according to your disbursement billing. You can have up to 99 of the same type of escrow. When do I analyze the escrow payments? You should analyze immediately after a major disbursement. Usually, this is when taxes are paid. The purpose of analyzing is to adjust the escrow payment, if necessary, to assure enough funds are in the account for the next disbursement cycle. How do I inform the borrower that a new constant is necessary and when it will change? Annual Escrow Analysis analyzes the account annually and adjusts payments at that time. The projection form is prepared to be mailed to the borrower indicating the escrow payment for the next 12 months. Can I pay interest on escrow funds as often as I want? The program accrues the interest payable to the borrower monthly. The interest can be paid monthly, quarterly, semiannually, or annually, according to the codes you entered in for the property state. The amount of interest accrued is stored in the I Escrow Record. When would I need to use a dealer code? The dealer code is important when printing checks. Using a dealer code instructs the program to print a consolidated check when more than one account is being disbursed to the same dealer. What are the comment lines for in Field E-12? The comment lines are for you to enter pertinent information relating to the record. The comment line in a Tax Record would be for a short legal description. For an Insurance Record, enter the name of the insurance agent and phone number. If changing insurance companies, enter a comment indicating which company to pay. I have entered the wrong Analyze Code and would like to change it. Is there an easy way to change it for all escrows? You can globally change the code in 03. ANALYZE through the Loan Servicing Implementation Program. E-mail or call MC Customer Service for assistance. |
Updated February 14, 2005 at 11:36 a.m.
