24 C.F.R. Appendix E to Part 3500—Arithmetic Steps


Title 24 - Housing and Urban Development


Title 24: Housing and Urban Development
PART 3500—REAL ESTATE SETTLEMENT PROCEDURES ACT

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Appendix E to Part 3500—Arithmetic Steps

I. Example Illustrating Aggregate Analysis:

ASSUMPTIONS:

Disbursements:

$360 for school taxes disbursed on September 20

$1,200 for county property taxes:

$500 disbursed on July 25

$700 disbursed on December 10

Cushion: One-sixth of estimated annual disbursements

Settlement: May 15

First Payment: July 1 

                      Step 1_Initial Trial Balance------------------------------------------------------------------------                                                      Aggregate                                           -----------------------------                                               pmt      disb       bal------------------------------------------------------------------------Jun.......................................         0         0         0Jul.......................................       130       500      -370Aug.......................................       130         0      -240Sep.......................................       130       360      -470Oct.......................................       130         0      -340Nov.......................................       130         0      -210Dec.......................................       130       700      -780Jan.......................................       130         0      -650Feb.......................................       130         0      -520Mar.......................................       130         0      -390Apr.......................................       130         0      -260May.......................................       130         0      -130Jun.......................................       130         0         0------------------------------------------------------------------------
                      Step 2_Adjusted Trial Balance       [Increase monthly balances to eliminate negative balances]------------------------------------------------------------------------                                                      Aggregate                                           -----------------------------                                               pmt      disb       bal------------------------------------------------------------------------Jun.......................................         0         0       780Jul.......................................       130       500       410Aug.......................................       130         0       540Sep.......................................       130       360       310Oct.......................................       130         0       440Nov.......................................       130         0       570Dec.......................................       130       700         0Jan.......................................       130         0       130Feb.......................................       130         0       260Mar.......................................       130         0       390Apr.......................................       130         0       520May.......................................       130         0       650Jun.......................................       130         0       780------------------------------------------------------------------------
                    Step 3_Trial Balance With Cushion------------------------------------------------------------------------                                                      Aggregate                                           -----------------------------                                               pmt      disb       bal------------------------------------------------------------------------Jun.......................................         0         0      1040Jul.......................................       130       500       670Aug.......................................       130         0       800Sep.......................................       130       360       570Oct.......................................       130         0       700Nov.......................................       130         0       830Dec.......................................       130       700       260Jan.......................................       130         0       390Feb.......................................       130         0       520Mar.......................................       130         0       650Apr.......................................       130         0       780May.......................................       130         0       910Jun.......................................       130         0      1040------------------------------------------------------------------------

II. Example Illustrating Single-Item Analysis (Existing Accounts)

ASSUMPTIONS:

Disbursements:

$360 for school taxes disbursed on September 20

$1,200 for county property taxes:

$500 disbursed on July 25

$700 disbursed on December 10

Cushion: One-sixth of estimated annual disbursements

Settlement: May 15

First Payment: July 1

 
                                          Step 1_Initial Trial Balance----------------------------------------------------------------------------------------------------------------                                                                              Single-item                                                     -----------------------------------------------------------                                                                  Taxes                     School taxes                                                     -----------------------------------------------------------                                                         pmt      disb       bal       pmt      disb       bal----------------------------------------------------------------------------------------------------------------June................................................         0         0         0         0         0         0July................................................       100       500      -400        30         0        30August..............................................       100         0      -300        30         0        60September...........................................       100         0      -200        30       360      -270October.............................................       100         0      -100        30         0      -240November............................................       100         0         0        30         0      -210December............................................       100       700      -600        30         0      -180January.............................................       100         0      -500        30         0      -150February............................................       100         0      -400        30         0      -120March...............................................       100         0      -300        30         0       -90April...............................................       100         0      -200        30         0       -60May.................................................       100         0      -100        30         0       -30June................................................       100         0         0        30         0         0----------------------------------------------------------------------------------------------------------------
            Step 2_Adjusted Trial Balance (Increase Monthly Balances To Eliminate Negative Balances)----------------------------------------------------------------------------------------------------------------                                                                              Single-item                                                     -----------------------------------------------------------                                                                  Taxes                     School taxes                                                     -----------------------------------------------------------                                                         pmt      disb       bal       pmt      disb       bal----------------------------------------------------------------------------------------------------------------Jun.................................................         0         0       600         0         0       270Jul.................................................       100       500       200        30         0       300Aug.................................................       100         0       300        30         0       330Sep.................................................       100         0       400        30       360         0Oct.................................................       100         0       500        30         0        30Nov.................................................       100         0       600        30         0        60Dec.................................................       100       700         0        30         0        90Jan.................................................       100         0       100        30         0       120Feb.................................................       100         0       200        30         0       150Mar.................................................       100         0       300        30         0       180Apr.................................................       100         0       400        30         0       210May.................................................       100         0       500        30         0       240Jun.................................................       100         0       600        30         0       270----------------------------------------------------------------------------------------------------------------
                                        Step 3_Trial Balance With Cushion----------------------------------------------------------------------------------------------------------------                                                                              Single-Item                                                     -----------------------------------------------------------                                                                  Taxes                     School taxes                                                     -----------------------------------------------------------                                                         pmt      disb       bal       pmt      disb       bal----------------------------------------------------------------------------------------------------------------Jun.................................................         0         0       800         0         0       330Jul.................................................       100       500       400        30         0       360Aug.................................................       100         0       500        30         0       390Sep.................................................       100         0       600        30       360        60Oct.................................................       100         0       700        30         0        90Nov.................................................       100         0       800        30         0       120Dec.................................................       100       700       200        30         0       150Jan.................................................       100         0       300        30         0       180Feb.................................................       100         0       400        30         0       210Mar.................................................       100         0       500        30         0       240Apr.................................................       100         0       600        30         0       270May.................................................       100         0       700        30         0       300Jun.................................................       100         0       800        30         0       330----------------------------------------------------------------------------------------------------------------

[59 FR 53908, Oct. 26, 1994, as amended at 60 FR 8816, Feb. 15, 1995. Redesignated at 61 FR 58479, Nov. 15, 1996]

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