Pub. 12 2022-2023 Issue 5

cases, the collector may only be open for a couple of hours per week. Making Payments Now that the bank has learned about the due dates, discount dates, installment information for all the agencies where they have parcels, and gathered the relevant tax information, it’s time to make the tax payments to each agency. Payment collection can be one of the more difficult aspects of escrow tax processing. Texas, for example, has multiple districts that may or may not collect their own portion of property taxes, often requiring the financial institution to go to multiple departments to get the entire tax amount owed. Special districts include central appraisal districts, drainage districts, municipal utility districts, etc. Sometimes the county will collect for all entities, sometimes the Central Appraisal District collects for all entities, and in some instances the County and the CAD split the collection, meaning the financial institution needs to cut separate checks to each. When the financial institution goes to make the payment(s) to the taxing agency, there will be different options for how to pay based on the discretion of the agency. Some of the common methods include: • Excel list of all parcels to be paid along with individual checks for each property • Excel list of all parcels to be paid along with one check that covers all properties • Electronic submission of payments via an intermediary such as GovTech or Autoagent • Submission of property tax bills with a check for each individual property Tax Bills, Rules & Fees Another area of complexity is taxing agency guidelines around tax bill rules and fees. These also vary from region to region, but there are some common themes financial institutions will encounter. Duplicate bill fees are common throughout the country. These occur in agencies where the tax bill must be submitted along with payment. Tax offices can charge high duplicate bill fees that can reach as high as $25 per tax bill. When requesting tax bills, it is possible to encounter tax offices that will outright refuse to provide duplicate tax bills to any third party — including the financial institution that holds the mortgage. In these cases, the property owner, and only the property owner, will receive the tax bill information. Banks must coordinate with their borrowers to get the tax bill to remit payment to the taxing agency. Fees aren’t just limited to duplicate tax bills. Other common fees include per-parcel payment fees, wire fees, pay file fees, etc. Whether or not an institution will have to pay these fees depends on the agency and the method of payment. Conclusion The complexities of escrow tax processing are immense, especially when you have mortgage portfolios that cross state lines. The key to making timely and accurate payments while keeping both the borrowers and taxing agencies happy is research. Learning the nuances in each area a bank has parcels and keeping a detailed record of those nuances year-over-year will help ensure that property tax season goes smoothly for any financial institution, and that costs and penalties are kept to a minimum. An institution’s portfolio size and how far it stretches geographically will inform how much of an undertaking this will be, and how much staff will be needed. If all of this seems like a bit too much to manage, there are third-party escrow tax servicing vendors that can take this off a bank’s plate. Finding a vendor to outsource escrow tax processes will decrease workload, reduce missed payments, and streamline the payment and refund process so staff can focus on other key tasks while ensuring the mortgage portfolio is up to date. Info-Pro takes the complex and makes it easy. We collect and integrate data from the 26,000+ property tax authorities nationwide into a user-friendly software platform, enabling financial institutions to easily identify property tax delinquencies and pay escrow taxes. www.coloradobankers.org 22

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