Escrow Disclosure Statement:   This statement shows all actual transactions for your account since your last escrow analysis, when applicable.   The previous year's projected escrow activity is also shown for comparison if available. Then, for the next 12 months, the expected activity in your escrow account is projected (including any surplus or shortage) in order to calculate your new monthly mortgage payment.

 

Allotted "Cushion":   Your allotted cushion is the amount of funds set aside in your escrow account to cover unanticipated expenditures, such as increases in your tax bills or insurance premiums.  This cushion amount should never exceed one-sixth (1/6) of your total anticipated disbursements for the coming year.   Your loan documents or state law may specify

 

Projected Payments:  This represents 1/12 of the anticipated annual escrow disbursements as of the last analysis you received.  This is what we expected you to pay into your escrow account each month to cover the projected disbursements.

 

Actual Payments:   The actual amount that you deposited into your escrow account each month.

 

Projected Disbursements: The amounts we expected to disburse on your behalf to pay various tax and insurance entities.

 

Actual Disbursements:  The amount we actually disbursed on your behalf to pay various tax and insurance entities.

 

Projected Escrow Account Balance: The escrow balance we expected your account to show at the end of each month based on the Projected Payments and Projected Disbursements from your last analysis. 

 

Actual Escrow Account Balance:  The actual balance in your escrow account at the end of each month based on the Actual Payments and Actual Disbursements that occurred during the period.

 

Aggregate Analysis:  The accounting method used to conduct an escrow analysis by computing the sufficiency of the escrow account funds by analyzing the account as a whole.

 

Minimum Required Balance: The funds aid into the escrow account to cover unanticipated disbursements or increases in disbursements due to inflation, rate increases, or other factors.   Section 10 of the Real Estate Settlement Procedures Act (RESPA) authorizes lenders to collect and maintain up to one-sixth (two months) of your total disbursements in your escrow account at all times unless your mortgage document or state law specifies a lower amount.   This amount is calculated by taking the beginning escrow balance, adding in the actual monthly escrow payments, and subtracting the actual tax and insurance payments.

 

Trial Running Balance:  The accounting process that derives the target balances over the course of an escrow computation year.   This is a projection of the escrow account activity showing a month-to-month running balance.

 

Buydown:  The amount of the monthly subsidy for each payment per the buydown agreement. Buydown funds are a lump sum payment to the lender at closing from the seller, buyer, third party or a combination of these, allowing the lender to reduce the interest rate during the early years of a loan. 

 

Total Monthly Base Payment Amount:   The Total Annual Escrow amount divided by 12 months.  This is the amount we need to collect each month to cover the total of your escrowed items per year.  This amount does not include any shortage or surplus.

 

Lowest Projected Balance:   This amount is calculated by taking your beginning escrow balance, adding the projected monthly escrow payments, and subtracting the projected tax and insurance payments when they are due.

 

Shortage:  The amount by which a current escrow account balance falls short of the target (required) balance at the time of the analysis.

 

Surplus:  The amount the current escrow account balance exceeds the target (required) balance.  Surpluses in excess of $50.00 will automatically be refunded if the account is current.  Surpluses less than $50.00 will be credited to future monthly payments.

 

Target Balance:  The estimated month-end balance in the escrow account that is sufficient to cover the remaining disbursements from the escrow account in the computation year, taking into account the remaining scheduled payments, as well as any remaining balance