The Real Estate Settlement Procedures Act (Regulation X) has contained rules for administering escrow accounts for many years. Both the Truth in Lending Act (Regulation Z) and the interagency flood regulations contain provisions that require escrows in connection with certain loans. The Real Estate Settlement Procedures Act and Regulation X have requirements for establishing and maintaining escrow accounts. We will explain how those rules are changing.
Higher-Priced Mortgage Loans – On January 19, 2021, the Consumer Financial Protection Bureau (CFPB) issued a final rule amending section 1026.35 of Regulation Z to implement a requirement of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). The final rule exempts certain insured depository institutions and insured credit unions from the requirement to establish escrow accounts for certain higher-priced mortgage loans (HPMLs).
It exempts from the HPML escrow requirement any loan made by an insured depository institution or insured credit union and secured by a first lien on the principal dwelling of a consumer if:
- The institution has assets of $10 billion or less;
- The institution and its affiliates originated 1,000 or fewer loans secured by a first lien on a principal dwelling during the preceding calendar year; and
- Certain of the existing HPML escrow exemption criteria are met.
Flood Insurance Frequently Asked Questions – On May 11, 2022, the Board of Governors of the Federal Reserve System, the Farm Credit Administration, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency (jointly, the agencies) issued revised questions and answers (Q&As) regarding federal flood insurance law and the agencies’ implementing regulations. The Q & As address a number of flood related topics including escrow rules. The revised Q & As were effective upon publication
This webinar covers all of the escrow rules, including the long standing and the recently revised requirements of the flood regulations, Regulation X and Regulation Z.
What You’ll Learn
- Which loans are required by Regulation Z and the flood regulations to have escrow accounts, and which are exempt;
- The limitations on the amount of the required escrow payments at origination and over the life of the loan;
- How to conduct an escrow analysis;
- How to determine an escrow account computation year;
- The rules for preparing the initial escrow account disclosure statement;
- The TRID rules regarding the escrow notices required in the Closing Disclosure;
- The expanded Flood Hazard Notice for Escrow information;
- The flood insurance option to escrow notice;
- How to prepare the annual escrow account statement;
- How to resolve a surplus, a deficiency or a shortage;
- Regulation X rules for timely escrow payments and treatment of escrow balances;
- Regulation Z rules regarding escrow cancellation notices;
- The recordkeeping rules for escrow accounts;
- The penalties for the failure to submit an initial or annual escrow account statement; and
- The revisions to the Regulation Z rules made by the EGRRCPA
Who Should Attend
The program is designed for compliance officers, operations personnel, mortgage loan officers, loan originators and others involved in opening and maintaining escrow accounts for mortgage loans.