What is a plain English definition of the Aggregate Adjustment on the HUD Settlement Statement?

Thursday, February 16, 2012

When the lender figures the number of months to collect in escrows for taxes and insurances based on due dates for each and the first payment due date for the mortgage, it is compared to Federal guidelines which dictate the maximum cushion allowed.  If the amount calculated by the lender is too high, a credit or “aggregate adjustment” is given to bring the amount to the allowed beginning balance for the escrow account.  This figure will always be a negative (credit) or zero.  The more technical answer is the difference between the amount of a borrower’s required initial deposit computed using aggregate analysis compared to what the lender would have required if the lender had used single item analysis.