Suspense account

If a borrower sends less than a full monthly payment, the servicer may park that money until it adds up to a full payment. Official Regulation Z language calls that a suspense or unapplied funds account. An escrow account holds taxes and insurance. A completed periodic payment is applied to the loan. Suspense is the holding place in between.

12 CFR 1026.36 is PRIMARY for the suspense or unapplied funds account heading. 12 CFR 1026.41 is supporting periodic-statement context for partial-payment disclosures.

Statements show unapplied funds next to escrow and past-due amounts. Readers need the holding account kept distinct from escrow.

• Escrow account

• Mortgage servicer
• Partial payment

In mortgage servicing, a suspense or unapplied-funds account holds a partial payment until it equals a periodic payment. Servicers may instead credit or return a partial payment. Timing and handling beyond the regulation are not asserted.