Mortgage lending has changed considerably over the past 70 years. One of the areas that have changed the most has been the administration of escrow accounts and the related functions of taxes and insurance. During the past decade, there have been drastic changes in the manner in which lenders must administer and account for escrows. This course will describe important issues related to escrow administration as it is used today. After completing this course, students will have learned the purpose and major components of escrow; ecrow analysis; escrow analysis method and procedure; key aspects of hazard insurance and guidelines for acceptable hazard insurance coverage; the purpose of mortgage insurance and various aspects about HUD/FHA loans and MIPs; the three basic types of real estate taxes and problems the lender may face in administering the tax payment process; and escrow concerns during a servicing transfer and other related issues.

Course Outline:

Lesson 1 - Escrow in Mortgage Lending

• Mortgage Lending and Loan Administration
• Risks in Mortgage Lending
• Definition and Purpose of Escrow
• Loans that Require Escrow
• Components of an Escrow Account
• Advantages and Disadvantages of Escrow

Lesson 2 - The Escrow Department

• Escrow Obligations
• Escrow Department Functions
• Escrow Department Resources and Tools
• Knowledge, Skills, and Experience of Escrow Department Staff
• Escrow Department Players

Lesson 3 - Escrow Analysis

• Escrow Analysis Overview
• RESPA Rule
• Analysis Method
• Surpluses, Shortages, and Deficiencies
• Escrow Analysis Statement
• Action Plan for Escrow Analysis

Lesson 4 - Property Insurance and Flood Insurance

• Property Insurance
• Acceptable Coverage
• Lender-Placed Insurance
• Flood Insurance
• Other Natural Disasters
• Insurance Losses
• Other Insurance Functions

Lesson 5 - Mortgage Insurance

• Mortgage Insurance
• Conventional Loans
• FHA Loans
• VA Loans

Lesson 6 - Real Estate Taxes

• Real Estate Taxes and Escrow
• Types of Real Estate Taxes
• Outsourcing
• Administering Tax Payment
• Importance of Timely Payment

Lesson 7 - New Loans and Servicing Transfers

• New Loans
• Servicing Transfer Issues
• Escrow Functions during Servicing Transfers

Course Credit:
Completion of this course earns five points toward MBA's Certified Mortgage Banker (CMB), or Certified Mortgage Technologist (CMT) designations. This course also earns five points towards MBA's Mortgage Servicer, Loan Administration Achievement Certificate (CMS Level I).