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What is the difference between an escrow shortage and an escrow deficiency?

April 26, 2017Deficiency difference escrow shortage

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What is the difference between an escrow shortage and an escrow deficiency?

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Shortage means an amount by which a current escrow account balance falls short of the target balance at the time of escrow analysis. Deficiency is the amount of a negative balance in an escrow account, if a servicer (MassHousing) advances funds for a borrower. A mortgage servicer must perform an escrow analysis before seeking repayment of the deficiency.