What is the requirement regarding refunding an overage in an escrow account?

The requirement regarding refunding an overage in an escrow account is that it must be refunded within 30 days. This rule is in place to ensure that borrowers receive timely access to their funds when there is excess money in their escrow account, typically because of over-collections for property taxes or insurance premiums.

Timely refunds are essential as they help maintain trust and transparency between the lender and the borrower. By mandating a 30-day timeframe, regulations encourage lenders to review and manage escrow accounts efficiently, allowing borrowers to benefit from any surplus funds without unnecessary delay.