The homeowner’s escrow account is used to pay property taxes, insurance premiums, pest control fees, and so forth. Since the cost of these increase over time, it is necessary to periodically adjust the homeowners monthly payment to cover these increases. Also, you should review the homeowner's escrow balances and payments periodically, and adjust them as necessary, to ensure adequate funding for escrow disbursements while avoiding the accumulation of excessive balances.
It is good practice to analyze escrow a minimum of once a year, or when you see very large increases in a particular escrow category or for a particular homeowner.
As a lender, affiliates have several responsibilities that necessitate the use of escrow analysis to satisfy the requirements assigned to any lender. These guidelines are described in some detail in the Keystone and Escrow Management Guidelines section.
These guidelines are not intended to cover everything required of an affiliate in managing homeowners' escrow nor do they constitute any legal advice. Always consult with a local attorney to determine what laws and guidelines are applicable to your affiliate.
Escrow Analysis provides tools that 1) show the status of the homeowner's current escrow liabilities, payment, and balances; 2) recommend adjustments based on these; and 3) provide adjustment letters to be sent to the homeowner.
To access the Escrow Analysis tools, go to the Escrow Analysis screen by opening the Finances tab in the Keystone ribbon and clicking Analysis.
The Escrow Analysis process involves the following steps:
Keystone Escrow Analysis follows the procedures defined by the Real Estate Settlement Procedures Act (RESPA) as closely as possible. For more information about RESPA, refer to the Keystone and Escrow Management Guidelines section.