Escrow Reporting
|
|
|
465 Report
The 465 Report lists all loans with escrow share types that went through the escrow recalculation process. The options specified in the fields on the 465 Report Rules are the system defaults on the New Loan - Escrow Information tab and Loan - Escrow Info tab. The 465 Report must be scheduled to run monthly for escrow recalculation to occur.
You can set up escrow accounts on the system, but not have the 465 Report scheduled. However, the Portico Team strongly suggests that you take advantage of the automation that the 465 Report offers to ensure accurate recalculation of your member’s escrow accounts.
Types of Disclosure Statements
There are three types of disclosure statements, initial, annual, and short year:
| Type of Disclosure | Statement Description | Who Produces |
|---|---|---|
|
Initial |
The initial disclosure provides a projection of escrow activity on the loan for the upcoming year and is given to the member at the time of the new loan setup. Also, you must send the member a copy of the initial disclosure when the member’s first escrow recalculation by the system occurs. |
Credit union |
|
Annual |
This is the member’s record of the activity that occurred on the escrow account during the prior 12 months, a projection of activity to occur during the next analysis period, and information regarding any surplus, shortage, or deficiency in the escrow share account as well as any change to the loan payment amount. This statement is produced automatically each year at the time analysis occurs for the loan. |
Portico, if 465 Report scheduled. Credit union, if 465 Report not scheduled |
|
Short year |
This statement is similar to the annual disclosure statement, but will only cover the activity for the number of months since the last analysis occurred. The number of months covered will always be less than 12. The short year statement is produced automatically the first month end after the loan is paid off, matures, or is transferred. You can also request a short year statement by selecting Y - Recalculate in next month-end back-office cycle from the Recalculate drop-down list on the Loans – Escrow Info tab. |
Portico, if 465 Report scheduled. Credit union, if 465 Report not scheduled |
Production Criteria
The 466 Report produces an escrow account disclosure statement. The 466 Report consists of the annual disclosure statement and the short year statement. These statements are automatically produced at the same time the system produces the 465 Report. The system generates an annual disclosure statement based on the next analysis date specified on the Loans – Escrow Info tab.
The annual disclosure statement provides a 12-month account history for the member, a projection of the last month’s information, prior and coming year projections, current and new payment breakdowns, balance comparisons, and statements about any surplus, shortage, or deficiency amounts. Credit-union defined messages that you set up on the V01-V06 message details will appear on the annual disclosure statements for members with a surplus, shortage, or deficiency in their escrow account. Also, the message specified on the V07 message detail will print on the statement if the Message Print check box is selected in the Escrow Loan group box on the Loan Profiles - Additional Information tab.
The system generates a short year statement when one of the following circumstances occurs:
- The loan balance becomes zero. For example, the loan is paid off, matures, or is transferred.
- You request the short year statement by selecting Y - Recalculate in next month-end back-office cycle from the Recalculate drop-down list on the Loans – Escrow Info tab.
Message Details V01-V07
The credit union-defined messages that you set up on the V01-V07 message details will appear on the annual disclosure statements for members with a surplus, shortage, or deficiency in their escrow account, or if the member’s loan payment may change. The V01-V06 message details create a message based on the type of escrow item zero (0) (shortage, surplus, or deficiency) as follows:
V01 - The system uses this message when the calculated surplus in the escrow account is less than the value specified in the Min Amt To Refund Surplus field on the 465 Report Rules.
V02 - The system uses this message when the calculated surplus in the escrow account is equal to or greater than the value specified in the Min Amt To Refund Surplus field on the 465 Report Rules.
V03 - The system uses this message when the calculated shortage is less than one month’s escrow deposit, and the member’s calculated escrow share balance is lower than the allowed cushion amount.
V04 - The system uses this message when the calculated shortage is equal to or greater than one month’s escrow deposit, and the member’s calculated escrow share balance is lower than the allowed cushion amount.
V05 - The system uses this message when the calculated deficiency is less than one month’s escrow deposit, and the calculated escrow share balance is less than zero.
V06 - The system uses this message when the calculated deficiency is equal to or greater than one month’s escrow deposit, and the calculated escrow share balance is less than zero.
V07 - You can use the V07 message detail to alert your member that there could be a change to the monthly principal and interest amount on the loan. This situation could occur depending on the escrow loan’s payment type such as 006 or 009. The message specified on the V07 message detail will print on the statement if the Message Print check box is selected in the Escrow Loan group box on the Loan Profiles - Additional Information tab.
The system will print one of the following sentences on the annual disclosure statement, and then will print your message:
- This means you have a surplus of $XXX.XX.
- This means you have a shortage of $XXX.XX.
- This means you have a deficiency of $XXX.XX.
In the event that the member has both a shortage and a deficiency, the system will print the following messages:
This means you have a deficiency of $XXX.XX. (followed by the V05 or V06 message depending on the amount of the deficiency)
After considering the deficiency, you still have a remaining shortage of $XXX.XX. (followed by the V03 or V04 message depending on the amount of the shortage)
Payment Amount
The system will print a new payment amount on the annual disclosure statement. Based on the amount of the surplus, shortage, or deficiency amount, this payment amount may or may not be adjusted by the surplus, shortage, or deficiency amount. The payment amount will always be adjusted unless a surplus is calculated that is equal to or greater than the amount specified in the Min Amt To Refund Surplus field on the 465 Report Rules. In that case, the unadjusted payment amount will appear on the notice.
In the case of a simultaneous deficiency and shortage, the system will print one new payment adjusted by the aggregate amount of both the deficiency and the shortage.
Based on the amount of the surplus, shortage, or deficiency and the print options specified on the 465 Report Rules, both the adjusted and the unadjusted payment amounts may appear on the notice.