What action must a credit union take for a deficiency that is less than one month's escrow payment?

A credit union must allow a deficiency that is less than one month's escrow payment to exist while requiring payment within 30 days. This approach ensures that the borrower is given a specific timeframe to address the shortfall, which aligns with standard lending practices that emphasize communication and repayment options over more drastic measures.

By providing a 30-day period for the borrower to remit the deficiency, the credit union effectively maintains a constructive relationship with the borrower, allowing them the opportunity to rectify the situation without compromising their financial standing or the status of the escrow account. This method also helps prevent unnecessary escalation to foreclosure or the closing of the escrow account, which could create further complications for both the borrower and the credit union.

Ensuring borrowers are notified of any deficiencies and given an opportunity to correct them fosters a more cooperative lending environment, promoting better outcomes for all parties involved.