What is Interest on Escrow or Interest on Loss Draft Withholding?
Interest on escrow (IOE) or interest on loss draft (IOLD) withholding is an amount withheld from IOE or IOLD payments made to the borrowers, similar to taxes withheld from employment income. Withholding is rare and is only used if the federal government notifies the servicer withholding is required. Reasons for withholding include back taxes held by the borrower, and a missing TIN number. Both the withholding amount and the interest paid are reported to the IRS, and both should appear on the 1099 forms. The withholding is set at 20 percent in Servicing Director, but you can change it in the Company Screen - End of Year tab.
Environment:
Servicing Director
ArticleNumber:
000054177
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