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ESCROW DISCLOSURE SOFTWARE
AGGREGATE ACCOUNTING
PROMOTION PRICE: $69.00
REGULAR RETAIL: $99.00
Amortization Software $39.00 - Amortization, Loan Amortization, Fixed and Variable-Rate Amortization Schedule and Interest-Only Loan Software
National LawForms Escrow Disclosure Software prompts the user through a series of questions and then fills out the Escrow Disclosure form using the Aggregate Accounting method. The software works with an initial, annual, or short-year Escrow Disclosure statement. Save and retrieve documents for future use.

We also include an escrow adjustment tool built-into our Escrow Disclosure Software designed to help the end-user understand and compute the Aggregate Escrow Adjustment.

Learn more about escrow disclosure
How is the aggregate escrow adjustment calculated?
Frequently asked escrow disclosure questions
Legal Resource Center
Escrow Disclosure Software $39.00
Download Escrow Disclosure Software Demo
  ESCROW DISCLOSURE SOFTWARE FEATURES National LawForms Software Products for Attorneys & Legal Professionals
  INCLUDED WITH ESCROW DISCLOSURE SOFTWARE PURCHASE National LawForms Software Products for Attorneys & Legal Professionals
Top of Escrow Disclosure Software PageEVALUATE OUR ESCROW DISCLOSURE SOFTWARE BEFORE YOU BUY

The best way to get a full appreciation of the value our software provides is to actually use the program before you buy it. With this in mind, we have developed a fully functional program that does much more than just show you how the program works, in fact the demo is actually the same version we ship you when you purchase the product. We limit the principal amount in the Escrow Disclosure software. All other variables can be changed and calculated by simply selecting the calculate button once you have entered the desired variables of the loan. We can have you up and running immediately the same day your order is placed!

Top of Escrow Disclosure Software PageTECHNICAL SUPPORT

One year of Technical Support included with purchase. Check out our Knowledge Base where you can find answers to frequently asked questions and resolve technically related issues. We have an excellent database of notes, technical articles & tutorials to help make your experience with our software an enjoyable one. Submit questions via email or if you're still experiencing difficulty you may speak with one of our friendly and courteous support representatives.

Top of Escrow Disclosure Software PageUPGRADE ASSURANCE

One year of upgrade assurance, simply stated: its like having an insurance policy for your software. If LawForms releases a new version within a year of purchase you are entitled to receive that update for FREE!

Top of Escrow Disclosure Software Page30-DAY MONEY BACK GUARANTEE

That's right, we are so confident that you will be happy with our Escrow Disclosure Software that we guarantee it!

Top of Escrow Disclosure Software PageINTUITIVE INTERFACE

Simple design. Type information on the screen exactly as you would type on the form itself. There are many ways to avoid redundant typing.

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LawForms strictly protects the security of your personal information when placing orders with us and honors your choices for its intended use. We carefully protect your data from loss, misuse & unauthorized access or disclosure. Furthermore we will not rent, sell or otherwise distribute your personal information per our Privacy Policy. Feel comfortable ordering from our secure shopping cart which has been verified by XRamp Technologies.


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  SOFTWARE FEATURES National LawForms Software Products for Attorneys & Legal Professionals
LIST OF ADDITIONAL FEATURES
  • Real time auto-calculation feature, we do the math!

  • Smart-key tab driven menu system

  • Form field focus highlights the current data field at all times

  • Preview document feature

  • Easy client save and retrieval from within the program

  • Network Compatible & Multi User Ready

  • Easy set-up wizard – Ready to use in minutes!
  GENERAL INFORMATION & ESCROW TERMS National LawForms Software Products for Attorneys & Legal Professionals
Top of Escrow Disclosure Software PageESCROW DISCLOSURE

Think of an escrow account as a special checking account. Each month a certain amount of money is set aside in your escrow account to pay real estate taxes, hazard insurance, mortgage insurance, and other escrow related items, when they are due. Your escrow payment is part of your total monthly mortgage payment. It is collected along with the principal and interest portion of your mortgage payment.

Each year, your account is reviewed to estimate future payments to and disbursements from your escrow account. The process of reviewing your account is referred to as escrow analysis. The analysis method required by the Real Estate Settlement Procedures Act (RESPA) for residential loans is called aggregate analysis. The aggregate method of escrow analysis is similar to balancing your checkbook. Payments go into and disbursements go out of your escrow account to give you a monthly escrow balance. RESPA requires lenders to provide borrowers with an Initial Escrow Account Disclosure Statement within 45 days of closing, and an Annual Escrow Account Disclosure Statement at least once every twelve months thereafter. These statements are designed to provide information regarding the anticipated tax and insurance activity in the escrow account.

MONTHLY PAYMENT

The monthly payment amount is 1/12 of the amounts of the items being escrowed. This may include taxes, hazard insurance, mortgage insurance and/or flood insurance, among other things. The terms of the loan determine what items are being escrowed.

AGGREGATE ADJUSTMENT (LINE 1008)

Aggregate Adjustment (line 1008) : If too much money is being collected on lines 1001-1007, the lender gives a credit on line 1008. This is usually a negative number, or may be zero. Most lenders do not allow a positive number on line 1008.

Top of Escrow Disclosure Software PageINITIAL PAYMENT

The total amount the lender is allowed to collect at closing to deposit in the escrow account. The initial payment is the total of lines 1001-1008.

CUSHION

Additional money the lender is allowed to keep in the escrow account, to ensure the account balance will not go below zero if taxes or other rates are increased. This is usually equal to two months worth of monthly escrow payments. Some loans allow only 1 month of cushion, and some allow 0. By law, the cushion cannot equal more than 2 months of escrow payments.

WAIVE

The lender does not require the borrow to escrow money for a particular item. If an escrow item is marked as waived on the disclosure screen, it will not be included in the escrow calculations.

STEP 3 (TOTAL MONTLY PAYMENTANNUAL INTEREST)

Disbursement Date : The disbursement date means the date on which the lender actually pays an escrow item from the escrow account. However, the lender must pay the items in a timely manner, that is, on or before the deadline to avoid a penalty. This is required as long as the borrower's payment is not more than 30 days overdue. Borrowers should review their annual escrow statement to make certain the lender did not make late payments and charge any penalties to the borrower's account.

  FREQUENTLY ASKED ESCROW QUESTIONS (FAQ's) National LawForms Software Products for Attorneys & Legal Professionals
Top of Escrow Disclosure Software PageSOURCE OF INFORMATION

Information for this section was obtained from the Department of Housing and Urban Development which is an excellent resource for Escrow Disclosure and Aggregate Accounting.

Section 10 of the Real Estate Settlement Procedures Act (RESPA) limits the amount of money a lender may require the borrower to hold in an escrow account for payment of taxes, insurance, etc. RESPA also requires the lender to provide initial and annual escrow account statements. The newest escrow account regulations became effective in October 1997. monthly payment amount is 1/12 of the amounts of the items being escrowed. This may include taxes, hazard insurance, mortgage insurance and/or flood insurance, among other things. The terms of the loan determine what items are being escrowed.

DOES RESPA REQUIRE BORROWERS TO MAINTAIN AN ESCROW ACCOUNT?

NO. It is the lender's decision whether the borrower must maintain an escrow account for the purpose of paying taxes and other items. The HUD regulations only limit the maximum amount that a lender can require a borrower to maintain in an account. Adjustment (line 1008) : If too much money is being collected on lines 1001-1007, the lender gives a credit on line 1008. This is usually a negative number, or may be zero. Most lenders do not allow a positive number on line 1008.

DOES RESPA REQUIRE LENDERS TO MAINTAIN A CUSHION?

NO. The RESPA statute and regulations do not require the lender to maintain a cushion. However, since 1976 the RESPA statute has allowed lenders to maintain a cushion equal to one-sixth of the total amount of items paid out of the account, or approximately two months of escrow payments. If state law or mortgage documents allow for a lesser amount, the lesser amount prevails.

The new accounting method generally requires borrowers to maintain lesser amount in the account than the single-item method predominately used by lenders. However, many lenders have recently increased the escrow account cushion to the maximum allowed by law.

The recent regulations require lenders to reduce the size of the cushion in some accounts. Unfortunately, to avoid customer disapproval, some lenders may be giving their customers the impression that the HUD regulations require them to make this increase. This is a false impression. The lender, not HUD, has chosen to increase the cushion.

CAN HUD REQUIRE LENDERS TO PAY INTEREST ON ESCROW ACCOUNTS?

NO. In 1992 and 1993, legislation was introduced in Congress that would have required lenders to pay interest on escrow account balances, but it never passed. Some states do require interest to be paid on escrow account funds, but many do not.

Top of Escrow Disclosure Software PageMY ESCROW ACCOUNT PAYMENTS WENT UP, RATHER THAN DOWN. WHY?

There could be a couple of reasons why the person servicing your account is charging more for your escrow account. First, your bills may have gone up and the account changed to reflect that. Or, the account representative has changed the amount of cushion to the maximum amount allowed by RESPA. Check your statement from the service. You may also want to check your loan documents to figure out what is the appropriate cushion. If the mortgage loan documents are silent on the amount of the cushion or pre-accrual practices, then the RESPA "two month" limits apply, unless state law provides for a lower amount.

I RECEIVED A NOTICE FROM THE COUNTY THAT MY LENDER DID NOT PAY MY TAXES ON-TIME AND THE COUNTY IS ASSESSING A PENALTY. AM I RESPONSIBLE FOR THE BILL?

Send the bill to the lender. The lender should pay the penalty for failing to pay the taxes on time as long you were current in your mortgage payments. If the lender refuses, you may wish to follow the guidelines for filing a complaint.

ARE LENDERS REQUIRED TO PAY TAXES ON AN ANNUAL BASIS IF A DISCOUNT IS OFFERED TO THE CONSUMER?

NO. The Department published a new rule in the Federal Register in January 1998. The rule clarifies what a lender should do when a taxing jurisdiction offers a choice of payment on an installment basis or an annual basis. If there is a discount to the consumer when disbursing on an annual basis or there is an additional charge for disbursing on an installment basis, the lender may disburse on an annual basis. Otherwise, the lender should disburse tax payments on an installment basis. The borrower and the lender may mutually agree to another disbursement basis or date. The Department encourages lenders to follow the preference of the borrower.

WHAT STEPS SHOULD I TAKE IF THE LENDER DOES NOT PAY MY HAZARD INSURANCE ON TIME OR AT ALL AND MY INSURANCE IS CANCELED?

Lenders are required by Section 6 to make escrow account disbursements on time. If a lender fails to do so, a borrower may bring a private law suit under this Section. Therefore, if you incur any damages due to the lender's negligence, you may wish to consult an attorney.

You should also contact your lender immediately and send a copy of the bill. Some lenders list a special address and/or FAX number for insurance and tax bills. Keep checking with the insurance company to make certain the bill is paid. You may wish to pay the insurance company directly to avoid cancellation of your policy and then seek a refund from your lender. Keep copies of all your correspondence and payments. If you incur any damages due to the lender's negligence, you may wish to consult an attorney.

Top of Escrow Disclosure Software PageI GOT A NOTICE THAT MY HAZARD INSURANCE HAS BEEN CANCELED. MY LENDER FOCE-PLACED HAZARD INSURANCE WITH A DIFFERENT COMPANY AND IT IS NOW MORE EXPENSIVE. CAN THE LENDER GET AWAY WITH THIS?

As long as your mortgage payment is not more than 30 days late, Section 6 of RESPA requires the lender to make escrow payments, for taxes, insurance, etc., in a timely manner. You should write to your lender and complain. If your lender does not refund the difference or otherwise resolve your complaint satisfactorily, you may wish to file a complaint with HUD or the Consumer Protection Office of your State Attorney General's Office. You may also wish to consult an attorney.

WHAT STEPS SHOULD I TAKE IF I THINK THE LENDER IS REQUIRING TOO MUCH MONEY IN MY ESCROW ACCOUNT?

First, figure out the maximum amount RESPA allows to be required in your escrow account from the example. If you still believe your lender is requiring too much money, you should contact your lender for an explanation.

Section 6 of RESPA provides that borrowers may make a "qualified written request" to the lender concerning the servicing of their loan account. The request should not be included with the monthly mortgage payment. The lender must acknowledge the complaint within 20 business days and must resolve the complaint within 60 business days. If you do not get a satisfactory answer from the lender, you may wish to file a complaint with HUD. You should continue to make your mortgage payment during this time.

  CALCULATING THE AGGREGATE ESCROW ADJUSTMENT National LawForms Software Products for Attorneys & Legal Professionals
Top of Escrow Disclosure Software PageHOW TO CALCULATE THE AGGREGATE ESCROW DISCLOSURE

The following steps and example will help you estimate the amount of money you may be required to put into your own escrow account, either a new or existing account, under aggregate accounting:

  1. Determine the first payment date. The first payment date is usually 2-months after the closing date. Write the first payment date down on paper. For our purposes, let's assume the first payment date is in June.
  2. List all the payment amounts for items that will be paid out of your escrow account, and when paid, for the next 12 months. Consider the example where city taxes of $1,557.48 is due in September and $1,557.48 is due in March; and $807 in hazard insurance is paid in September. [If you have a payment like flood insurance, which is paid every 3 years, you must project a trial balance over that 3-year period.]
  3. Divide this total amount by 12 monthly payments ($3,921.96 / 12 = 326.83).
  4. Create a trial running balance for the next 12 months listing all payments to the escrow account and all payments out of the account, when these items are paid.
  5. Increase all the monthly balances to bring the lowest point in the account (March -$653.66) up to 0.
                                         In        Out     Balance Balance
June   326.83 0 326.83 980.49
July   326.83 0 653.66 1307.32
August   326.83 0 980.49 1634.15
September   326.83 1557.48 -250.16 403.50
October   326.83 0 76.67 730.33
November   326.83 0 403.50 1057.16
December   326.83 0 730.33 1383.99
January   326.83 0 1057.16 1710.82
February   326.83 0 1383.99 2037.65
March   326.83 2364.48 *-653.66 *0
April   326.83 0 -326.83 326.83
May   326.83 0 0 653.66
  1. Add any cushion your lender requires to the monthly balances. The cushion may be a maximum of 1/6 of the total escrow charges or 2 * 326.83 = $653.66. The account should fall to the cushion at least once during the year. In our example, it is in March.
  2. The initial payment is the amount the lender is allowed to collect at closing to established the escrow account. It is the sum of the low point plus the cushion amount. For our example, $1,307.32 is the initial payment.
  3. The aggregate escrow adjustment is the difference between the deposit required under aggregate accounting and the sum of the deposits required under single-item accounting. We just calculated the deposit of $1,307.32 which is required under aggregate accounting. Looking at our HUD-1 Settlement Statement, we see the following reserves deposited with the lender at closing:

Hazard Insurance 5 x $67.25 = $336.25
City Tax 4 x $259.58 = 1,038.32
For a total of $1,374.57 under single item analysis.
Aggregate Escrow Adjustment is -67.25 or $1,307.32 - 1,374.57.

By law, the lender is not allowed to collect more than the initial payment. The aggregate adjustment (line 1008 of the settlement statement) is the amount the lender must 'credit' the borrower at closing, so that they don't collect more than the initial payment amount.

DOES RESPA REQUIRE BORROWERS TO MAINTAIN AN ESCROW ACCOUNT?

NO. It is the lender's decision whether the borrower must maintain an escrow account for the purpose of paying taxes and other items. The HUD regulations only limit the maximum amount that a lender can require a borrower to maintain in an account. Adjustment (line 1008) : If too much money is being collected on lines 1001-1007, the lender gives a credit on line 1008. This is usually a negative number, or may be zero. Most lenders do not allow a positive number on line 1008.

Top of Escrow Disclosure Software PageDOES RESPA REQUIRE LENDERS TO MAINTAIN A CUSHION?

NO. The RESPA statute and regulations do not require the lender to maintain a cushion. However, since 1976 the RESPA statute has allowed lenders to maintain a cushion equal to one-sixth of the total amount of items paid out of the account, or approximately two months of escrow payments. If state law or mortgage documents allow for a lesser amount, the lesser amount prevails.

The new accounting method generally requires borrowers to maintain lesser amount in the account than the single-item method predominately used by lenders. However, many lenders have recently increased the escrow account cushion to the maximum allowed by law.

The recent regulations require lenders to reduce the size of the cushion in some accounts. Unfortunately, to avoid customer disapproval, some lenders may be giving their customers the impression that the HUD regulations require them to make this increase. This is a false impression. The lender, not HUD, has chosen to increase the cushion.

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