In one sentence
The periodic recalculation of a borrower's escrow deposit, comparing what was collected against what was disbursed and resetting the monthly amount.
The longer version
The analysis looks back at actual disbursements and forward at projected tax and insurance costs, then sets the deposit needed to cover the coming period plus any permitted cushion. A shortage is billed or spread; a surplus is refunded or credited.
It is a routine servicing function that becomes visible only when it goes wrong. A property whose assessment jumped or whose insurance renewed sharply higher will show a shortage the borrower did not expect, and the quality of the explanation depends on whether the underlying records are retrievable.
Common questions
- How often is escrow analysed?
- Annually is the norm, with off-cycle analyses triggered by a significant change such as a reassessment or a large premium increase.
- What causes an escrow shortage?
- Disbursements exceeding collections, most often from a property tax reassessment or an insurance renewal above the projection used to set the deposit.
- Can a borrower dispute an analysis?
- Yes, and the resolution depends on producing the bills and the payment history. That is a records question more than an analytical one.
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