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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) : 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.
Initial 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.
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.
Please do not hesitate to send us an e-mail (info@ruthtechnology.com) if you have questions, comments or if
you come across something that would contribute to this section.
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