Escrow Analysis

This is an optional add-on module if you're looking to calculate projected monthly dues for your escrow fees on loans.

Submit a Request to Support
If you'd like this module enabled on your account for $75 a month or $750 annually, please submit a request to support@brytsoftware.com so we can help set your account up.
We will be enabling the ability to add initial balances via the register to be able to reflect an initial Escrow Account balance at closing.

Disclaimer(s)
Please note this is a new module and may require some updates depending on your unique escrow scenarios. This tool is as it stands in Bryt's process, we can't promise it'll replicate your previous system. If the current guide's process doesn't apply to you at any time, please note anything different and email support@brytsoftware.com so our team can discuss new edge cases during our weekly company meeting. That would be greatly appreciated, thank you! 

Getting Set Up

You'll need the following two document templates to generate the escrow analysis documents. You'll go to your 'Admin - Document Templates' area to upload the two files.
If you're unfamiliar with the custom documents module process, we suggest reviewing that by going to that guide here. 

The first document is for a scenario where you've created a new loan with Bryt and you're looking to project Escrow dues for the first 12 months.

The second document will be used on the day of the borrower's anniversary (12 months have been paid, but maybe your scenario is different/earlier). However, you can set different projections for your fee types (projected payouts) so you may generate this document before 12 months have been collected. You would use this document template for loans you're carrying over from another system. 

Getting Started

There are two options to set up Escrow Analysis for loans in Bryt:

1) The first option is the'I need to make an initial escrow analysis to determine both the closing amount due for escrow and the monthly escrow payment.' - You'll use this option when starting a new loan in Bryt. Using this option, you will add your Escrow Fee Types, Projections for those to be included in the analysis, and a cushion. Bryt will then generate an initial escrow analysis document with a projected schedule of escrow-related dues and a calculated cushion amount to be collected at closing (which is added via the register's 'Add Initial Balances' button).

2) The second option is'I already have data on what to collect and just need to enter it.' - This option is used when you have balances from a previous system and already know what you're looking to collect for your escrow payments, your cushion amount, and Mortgage Insurance (MIP/PMI). You'll plug in those numbers and add the carryover balance from the previous system via the register's 'Add Initial Balances' button. You then add new projections for your Escrow Fee Types and generate an escrow analysis document, the analysis uses the loan's current numbers (currently set projections, current escrow balance, and cushion).

This guide will cover the Initial Escrow Analysis process to give you the full outline of the escrow analysis module. The second option outlined above will follow similar applications by adding initial balances, creating escrow fee types, adding projections (projected payouts) for those fee types, setting a cushion, and generating the escrow analysis document. 

1) You've clicked the 'I need to make an initial escrow analysis...' option, and you'll notice a gray banner stating you are in the initial escrow analysis mode - DO NOT record a payment, otherwise the initial escrow analysis will not generate properly.
If you have recorded a payment, you can try to delete any existing payments and work through this but you may need to recreate the loan if you have issues generating the initial escrow analysis document.

2) Escrow Analysis Summary
Next Escrow Analysis Date - This field is for the loan servicer's reference to know when your next escrow analysis will be conducted, it is not used in any calculations.
Next Payment Date With New Amount - This is used for the loan servicer's reference which indicates when a new escrow analysis amount will take effect when you run your second escrow analysis document. When you run the initial escrow analysis document, the projected escrow payment schedule will show the amount due at closing including the first 12 payments.
Escrow Cushion - The cushion collects extra periods to 'pad' your escrow balance and counter any potential negative balances as you need to make future payouts. By default, it's set at 2, which means you'll have two extra pay periods of Escrow Payments at any given time, where the system will attempt to have this padding throughout the life of the loan.
Escrow Payment - This is the system-calculated amount you'll set after generating the initial escrow analysis document or escrow analysis document.
Mortgage Insurance - This is the amount the loan servicer will charge for Mortgage Insurance Premium (MIP) or Private Mortgage Insurance (PMI). This amount is not included in the escrow analysis, this may be confused with 'Property Insurance' so you will want to look into that for your case. Any amounts paid toward this field will be summed and included in the end-of-year 1098 form under Box 5 for 'Mortgage Insurance Premiums'. Note: If your situation includes this MIP/PMI amount in the Analysis, you'll want to add it as an 'Escrow Fee Type' (steps for this are outlined further in the guide), allowing you to make payouts using the 'Pay' button. This way you can add a Projection (projected payout) for that 'Mortgage Insurance' Fee Type and it'll be accounted for in the Escrow Analysis that gets generated. At this time, including MIP in an analysis by adding it as an Escrow Fee Type, does not get accounted for on 1098 forms. If you include MIP/PMI in your analysis by adding a projection for it, DO NOT add it to the 'Mortage Insurance' field noted in the Escrow Analysis summary as it'll already be factored into the generated document's Escrow Payment amount, you'd be collecting it twice.
Total Payment - This is the sum of the Escrow Payment and Mortgage Insurance entered in the two entries above. 

3) Escrow Fee Types and Projections (Projected Payouts)

For the third step, you'll add your Escrow Fee Types and Projections for those escrow fees.

Escrow Fee Types
You'll click 'Add Fee Type' to create fee types like Property Insurance, Property Taxes, etc.
You'll add the Fee Type's Name and Description, then click 'Save'.
Optional - In this step, you may consider adding 'Mortgage Insurance' if you include MIP/PMI in your analysis. If you'd like to make payouts to MIP/PMI but not include it in the escrow analysis, then you'd still create an Escrow Fee Type here for MIP/PMI, which will provide you the 'Pay' button to associate payouts to.

Escrow Projections
To start, you'll want to click the 'Add Projection' button. 

1) You'll select the Escrow Fee Type this projected payout is for
2) Set the Projection date for the expected Escrow Payout date
3) Set the amount you expect to pay out for something like Taxes or Property Insurance
4) Optional: You then have a 'Create Loan Issue When Payment Due' checkbox to check and reveal an additional field 'Days Prior to Projection Date to Create Notice' for you to set the number of days to be notified before this Escrow Fee Type's projected payout date.
Note: The two areas you would see this as the projected payout date approached are via the Dashboard's Loan Issues widget, or via the loan's Summary page. 

Once you click 'Save' that'll be set up and the Loan Issues notice will appear 15 days before the payout's date.
When you go to make an Escrow Fee Type's payout, you'll use the 'Pay' button, and in that process, you'll be prompted to create a new projection date for the next payout. The same number of days will be used and you'll be notified the same way.  

The 'Edit' button allows you to Edit the added Escrow Fee Type's Projection details such as the date, amount, or enable/disable a Loan Issue reminder.

The only button available for Projections is a 'Delete' button in case you've accidentally set the wrong amount or date, you'd then 'Delete' and 'Add Projection' to correct that.
The 'Delete' button will always be available for Projections to make corrections. 

Escrow Fee Types: Buttons

From here, you've added your Escrow Fee Types and you'll see the 'Delete', 'Edit', and 'Pay' buttons.
Delete - This helps delete an accidentally added Escrow Fee Type, if you have a duplicate named Escrow Fee Type, you'll need to delete or edit one to prevent document generation issues. If you no longer see the 'Delete' button it's because you've made a Payout for that Fee Type.
Edit - This allows you to rename the Escrow Fee Type and edit the Description.
Pay - This will be used when you are ready to make a payout for the Escrow Fee Type.
If no projection is associated with an Escrow Fee Type, it simply records a Payout, which is noted in the Escrow History section. There will be a 'Delete' button for any payouts to undo and correct a payout.
When there is an associated Projection, you'll select the payout's Paid On date, Amount, Check Number (Optional), and 'Select a Contact to Pay (optional)' to associate a payee in your system contact list for that payout. During this payout process, you'll be prompted for a new projection date and amount which will set it up for your new escrow analysis once you've made all applicable payouts.
Once that's saved, the changes will reflect on that Projection with its new date and amount.
By following the same steps on other escrow fee types, you'll have successfully made payouts to each and set new projections for the next Escrow Analysis. 

4) Generating an Initial Escrow Analysis Document, Adding Initial Balances, and Setting the Escrow Payment

Once you've set up all of your Escrow Fee Types and Projections, you're all set to generate the 'Initial Escrow Analysis Template' document. 

In this example case, we added two projections for Property Insurance ($1,500) and Taxes ($1,000) and we have a cushion of 2 which means that the Initial Escrow Analysis document will reflect 2 period's worth of Escrow Payments due at closing.

Generate the Initial Escrow Analysis Document
You should have uploaded both escrow analysis document templates at the start of this article, so you'll now go to the loan's 'Documents' tab. You'll click the 'Generate Document' button, and select the 'InitialEscrowAnalysisTemplate.docx' Merge Document Template. The selected 'Document Date' will be used for the Document's statement date, it is not used for any math calculations. You'll then click 'Accept' and 'Accept' again to generate this document. You will now want to download the generated document by clicking the 'Doc' or 'Pdf' buttons, then open it to reference the 'Your Escrow Account Projection' table's first row that notes 'Due at Closing' amount. This is the amount the borrower owes and will pay you on the loan's closing date, which you'll then enter via the loan's Register tab.

Add the Initial Escrow Balance Due/Paid at Closing
We'll now enter this via the loan's Register Tab and clicking the 'Add Initial Balance' button:

You'll then select the 'Escrow Account' and the Initial Escrow Analysis document's amount paid at closing as the 'Initial Balance' amount.

Note: These steps of adding the amount paid at closing are only done at the start of a new loan for the initial escrow balance amount. The other scenario is for the second option when carrying over a loan's escrow balance and starting a loan midway in Bryt.

Once that Initial Balance has been added, you'll see it on the loan's Escrow tab under the 'Escrow History'.

Set the Loan's Escrow Payment
The last step here is to plug in the Initial Escrow Analysis document's monthly 'Escrow Payment' amount shown on the projection of dues. In our document's case shown above, we will enter '$208.33' by clicking '(edit)' on the Escrow Payment row.

You'll enter the Date when this will be effective, in our Initial Escrow Analysis case, we will start charging this as of 2/1/24, then enter '$208.33' under the 'Set Escrow Amount' field.

Click 'Save' and you'll see added Escrow Payment amount reflected on the loan's Schedule by clicking the 'Schedule' tab.

Note: The Escrow Payment amount that was set is reflected throughout the life of the loan but once you generate a new analysis, you'll repeat the same steps to assign a new Escrow Amount as of a certain due date, which will override the $208.33 amount set in our example from thereon. 

The 'Mortgage Insurance' field should be entered in the line below Escrow Payment for the Escrow Summary (image above) if it's an amount charged separately from Escrow and not included in the Escrow Analysis. This 'Mortgage Insurance' field in the Escrow summary will be included in Box 5 of the 1098 form that gets generated, but MIP/PMI included as an Escrow Fee Type currently does not get added onto 1098 forms. You'll also want to be mindful of the cushion you've set and the amount you're collecting for MIP/PMI if your case allows it.

Once you record your first payment, the Escrow tab's gray banner indicating the loan is in the initial escrow analysis mode will disappear. 

5) Escrow History and Paying Back Borrowers

After conducting your initial escrow analysis and recording your first year's payments, you'll see a history of credits and debits to the loan's Escrow Account by viewing the 'Escrow History' section. From there you'll be able to 'Delete' payouts to make corrections for incorrect payouts.
Under the Escrow History section, you'll also see a button for 'Pay Borrower' which allows you to refund the borrower for escrow amounts you've overcollected.

Note: The Payouts currently reflect as an addition to the Balance (in the image above) but we're working on fixing that. 

6) Final Notes and Subsequent Generation of Escrow Analysis Documents

All previous steps of this guide will familiarize you with what each button and field does. At this point, you'll be in a scenario where you're looking to generate an escrow analysis on a loan that already has balances, whether you've collected those payments via Bryt or are using Bryt to generate an analysis from a previous system's balances (Option 2 for 'I already have balances...'.)

What you need to know here is that the second document template titled 'EscrowAnalysis.docx' only looks at three things for its analysis calculations:
1) Cushion - as noted previously, the system uses this number to ensure a certain period's worth of Escrow funds is always available to pay out from. In our example, and for most cases, the cushion is 2 so you'd have two pay periods worth of Escrow Payments at any time.
2) Escrow Projections - the system will derive the calculations based on the sum of projections you've set (plus the cushion).
3) Escrow Balance - the third thing that's factored in is the current Escrow Balance when the document is generated (you'll want to make projection payouts before generating your Escrow Analysis document).
Note: You can use the 'Pay Borrower' button at any time if you've overcollected for escrow. 

So when you generate the Escrow Analysis document the 'Escrow Payment' amount listed reflects the cushion, projections, and the current escrow balance on the loan.