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Finally you can now offer escrows for taxes and homeowners insurance on all loans.
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| HOW? |
American Escrow (AE) is the 3rd party company that offers this service directly to the borrower. This escrow account is fully transferable regardless of how many times the loan is refinanced or sold. AE charges no late fees and allows the option of either electronic draft from the checking account (on the 5th, 15th or 25th) or a monthly coupon. This payment of monthly taxes and insurance is separate and NOT included in the borrower's mortgage payment. The flexibility of a loan's salability is greatly increased by NOT having escrows attached to them.
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| COST? |
The borrower will pay a one-time set-up fee of $250 and any reserve requirements will be paid at closing from the loan proceeds to American Escrow. The monthly portion of the taxes and insurance will include a $6 monthly maintenance fee.
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| IMPORTANT DETAILS |
1. Payment to American Escrow is shown on the HUD as Disbursement to Others.
2. The verbiage on the closing instructions can be worded as follows, "American Escrow form enclosed to be signed and please attach a voided check to set up escrows on monthly draft (if applicable)."
3. If you are or are not paying an upcoming tax or insurance bill from the proceeds of the loan please let AE know so we don't over/under collect for the escrow deposit.
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PROCEDURES |
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1. Fax the 1st page of the 1003, the Schedule B, Section 2 of Title or Tax Certification, the Appraisal Sheet (with parcel ID), and the Homeowner’s Insurance Declaration Page to 312-455-9033.
2. American Escrow calculates the escrow reserve requirements and includes the totals on the client enrollment application that is faxed back to you (typically) within an HOUR.
3. Use the total amount on LINE K of the client enrollment application to show on the HUD as “Escrow Deposit/Enrollment” – payable to American Escrow - under “Additional Settlement Charges (section 1300)” or under “Disbursement to Others”.
4. Send the client enrollment application along with the closing package and instructions to the closing agent.
5. The borrower must sign the AE enrollment application along with the other closing documents. The closing agent will give one copy to the borrower and return one copy with the disbursement check to American Escrow. If done outside of closing, the borrower must return the deposit amount from LINE K along with the signed application to American Escrow.
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