No, these are actual costs not escrow prepaids (not escrowing).

It sounds like they may have pre-paid with the government stimulus.

Ca REQUIRES mailing be 1st class postage pre-paid. 

Closing costs have to do with prepaid taxes, insurance premiums, HOA transfer fees, escrow fees, etc.Escrow and Insurance are your choice to pick, so if your fees are high, it's because you chose an expensive company.

They are highly levered and get hurt when rates rise (because the value of their holdings falls, while funding costs increase) and also when rates fall (because more mortgages get prepaid, and hedging can backfire).

However, stuff happens, and if the tenant vacates early for any reason, including death, you will likely need to refund a pro-rated portion of those pre-paid funds.

In short, you can get a refinance for the lesser of: (a) 70-75% of the new appraised value, and (b) the original purchase price plus all of your closing costs and prepaids/escrow setup for the new loan.This works pretty well for light to moderate rehabs, but will not get 100% of your cash back (perhaps up to 85% depending on ARV and amount of rehab).

Seems like their pre-paid last month rent and security deposit is more than enough to cover this.

You might consider joining Pre-paid Legal.

Just remember prepaid rent should be treated like escrow or deposit funds.