An annual escrow analysis completed on 10 March 2026 shows a surplus of $310 and the borrower is current.
Correct Answer
C) Refund the $310 to the borrower within 30 days of the analysis
Where the escrow analysis shows a surplus of $50 or more and the borrower is current, the servicer refunds it within 30 days; only a surplus under $50 may be refunded or credited at the servicer option. Other choices: crediting forward is the option for the smaller surplus and not for this one; holding it as extra cushion would push the account above the limit the analysis just measured; and the refund is owed without the borrower asking, so a 60-day request window is invented. Source: 12 CFR 1024.17(f)(2), surplus in the escrow account
Why This Is the Correct Answer
Where the escrow analysis shows a surplus of $50 or more and the borrower is current, the servicer refunds it within 30 days; only a surplus under $50 may be refunded or credited at the servicer option. Other choices: crediting forward is the option for the smaller surplus and not for this one; holding it as extra cushion would push the account above the limit the analysis just measured; and the refund is owed without the borrower asking, so a 60-day request window is invented. Source: 12 CFR 1024.17(f)(2), surplus in the escrow account
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