March 12, 2021: Retained Loans - Important Changes to Escrow Shortages

This information has been updated in KnowledgeOwl for Retained Servicing Loans.

  • View the newsflash content in KnowledgeOwl by navigating to News Flash! >> March 2021
  • View the updated escrow shortage content in KnowledgeOwl by typing “Escrow Shortage” in the Search Bar, or navigate to Escrow >> Escrow Shortages


Summary:  The option to repay an escrow analysis shortage in full has been removed from the Escrow Analysis Statement effective with loans analyzed on or after March 5, 2021.  


Customers may still contact us for the option to repay the shortage in full, and we can assist when they request this.  We cannot proactively offer this option.


  1. Shortages are automatically spread over 12 months at the time of the annual analysis - the next billing statement will contain an explanation of this change
  2. Rules for spreading escrow shortages greater than 12 months have been updated – the MSP Director Script should still be used, and details are shown below
  3. The procedure has been defined for handling calls where customers request to pay their escrow shortage in full 
  4. The newsflash advises ServiceMac is preparing a recorded training update on this topic – this will be shared as soon as it is available


Scroll down to read the procedure details that are also published in KnowledgeOwl


Details:

Paying Escrow Shortage

Important Note: As of March 2021, the escrow analysis statement has been updated to exclude the shortage repayment option.  The customer is now only presented with the new monthly payment amount, with the escrow shortage spread over 12 months.


We automatically spread escrow shortages over 12 months at the time of the annual analysis.

The next billing statement will have an explanation of this change.  Additionally, future monthly billing statements will reflect the new shortage amount.

Customers can request an escrow shortage spread of 24, 36, or 48 months ONLY IF:

  • Customer requests another option
  • Analysis results in a payment increase of 15% or greater of their current payment
  • The amount of months approved for the shortage spread will be based on based on which the amount of months that lowers the payment under the 15% increase


  1. Agent should calculate the payment increase
  2. Use the formula below to determine the percentage of the increase
    • Current Monthly Payment (or last monthly payment before the most recent change) X 0.15= $Dollar Amount of 15% payment change.
    • Add the total of the calculation above to the current monthly payment (or last monthly payment before the most recent change) to determine if the new payment reflects an increase of 15% or greater
  3. Run the Spread Escrow Shortage Director Script in MSP if borrower payment increase exceeds the 15% threshold
  4. Follow prompts to enter the requested information:
    • Amount of months requested for shortage spread 
    • Effective Date 
  5. When script is complete, advise customer of new monthly payment amount and effective date
  6. If payment was approved and new payment amount still not feasible
  7. Connect the customer to the Collections Queue
  8. Advise the customer they will be connected with a single point of contact to assist them with payment options


If the script is not working:

  • Open ANASPR task to request the spread
  • Include the following notes:
    • What length of shortage spread is being requested
    • The goal for extended shortage spread request
    • Desired monthly payment
  • Advise the following:
    • If the shortage spread is approved, the customer will receive a letter and new payment change
    • If the shortage spread is denied, the customer will receive a letter advising of the denial and reason


Customers may request to pay their Escrow Shortage in full prior to the effective date of their payment change:

If this is requested, we can assist them.  We CANNOT, however, proactively offer this option.  


  • Customers may:
    • Mail the Escrow Shortage payment along with their monthly mortgage payment
    • Apply funds toward escrow to pay the escrow shortage over the phone, on the web portal, or on the mobile app


IMPORTANT NOTE: 

As long as customers remit the full amount of the escrow shortage, system automation will adjust the payment, and the customer will receive a letter confirming that the shortage has been paid in full. 


A new monthly billing statement does not generate when customers pay their escrow shortage in full.  


If customer pays less than the total amount of their escrow shortage and request an adjustment to their monthly payment amount:

  • Open the ANA001 task 
  • Document the following in the task notes:
    • Dollar amount customer paid toward the Escrow Shortage (there is no minimum dollar amount threshold in order to request this new analysis)
    • Date the funds posted to Escrow
    • Request new escrow analysis as a result of escrow payment

Please speak with your supervisor or manager if you have any questions.