Tax and insurance escrow for seller financing?

[Shera Gregory]

I am considering doing seller financing to sell a home that I own out of state. I have been reading up on the Dodd-Frank requirements, etc so I know that I need to document the ability to pay and meet other rules even though this will be my one and only seller finance deal. 

My question for this forum is about the tax and insurance payments. I am concerned that the buyer might not plan ahead well enough to make the annual tax payments. I don't want to wind up with a tax lien in front of my mortgage. Can I set up an escrow arrangement and pay the taxes from those funds? I could do the same with insurance since I also wouldn't want them to let the insurance lapse and then wind up with no collateral on the loan.

[Shera Gregory]

Hi @James Sigsbee -- I've been looking at this some more and I may wind up using a loan servicing company. The fees are $30 per month total if you do an escrow with a small initial setup fee. The reason I decided to do that is I may want to sell the note in a couple of years and it will be more valuable if it has been professionally managed all along. 

I found a couple of good threads on BP searching for "loan servicing" including this one:

http://www.biggerpockets.com/forums/70/topics/115651-loan-servicer

Shera