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Aggregate Escrow Accounting
| When looking at another computer program to test the accuracy of
the Mortgage Computer Aggregate Escrow Disclosure in Mortgage Banker, I always arrive at a different
answer than MC.
Using the Mortgage Banker program, data is entered at the time of the Good Faith Estimate by Line Item. The amount to pay per escrow type is determined by dividing the annual amount by 12 to establish a monthly constant. Then, determine how much to pre-collect based upon the next pay date. Line Item makes no adjustment for time. At the time for closing of the loan, Line Item is converted to Aggregate Accounting. Using the data entered at the time of the Good Faith Estimate, a trial balance is run to establish the low point. In order to not exceed the low point, there are two ways to make the adjustment.
Using Field 1008 adjusts the amount being pre-collected on paper only. The closing department must make the adjustment to collect less cash at closing, and make the adjustment to the various escrow types for transferring to Loan Servicing. When using Lotus or similar packages to prove the Aggregate, you are not converting Line Item to Aggregate Accounting. You are entering the amounts and dates to pay, then dividing by 12 to establish the monthly constant. This will always come to a zero balance. Using a program to prove the results is not adjusting the Line Item disclosure that was provided on the Good Faith Estimate. In addition, there is no adjustment for how many months to pre-collect up-front. |
| Summary
The MC program is converting the Good Faith Estimate Line Item over to Aggregate Accounting. The MC program makes the adjustment for time and pre-collected funds. The benefit of using the MC program as designed is the ability to adjust the amount to pre-collect prior to closing, instead of making a paper adjustment using Field 1008. Then, manually making an adjustment after closing for funding and transferring to Loan Servicing. |
