CFPB Issues Mortgage Servicing FAQs

Sheppard Mullin Richter & Hampton LLP

Sheppard Mullin Richter & Hampton LLP

The CFPB recently released new FAQs regarding the Mortgage Servicing Rule and Regulation X and Regulation Z relating to escrow account guidance and analysis.

Putting it Into Practice:  Some key takeaways include the following:

  • The initial escrow statement is the first disclosure statement that the servicer delivers to the borrower concerning the borrower’s escrow account. It must include: (i) the amount of the monthly mortgage payment; (ii) the portion of the monthly payment going into the escrow account; (iii) itemized anticipated disbursements to be paid from the escrow account; (iv) anticipated disbursement dates; (v) the amount the servicer elects as a cushion; and (vi) trial running balance for the account.
  • Servicers must send the borrower the annual escrow account statement within 30 days of the completion of the escrow account computation year and conduct an escrow account analysis before sending the annual escrow account statement to the borrower.
  • The annual escrow statement must include, among other things, an account history that reflects the activity in the escrow account during the prior escrow account computation year and a projection of the activity in the account for the next escrow account computation year.
  • If there is a deficiency that is equal to or more than one month’s escrow account payment, the servicer may accept an unsolicited lump sum payment to resolve the deficiency. However, the servicer cannot require or provide the option of a lump sum payment on the annual escrow account statement. The annual escrow statement may only reflect that the servicer is allowing a deficiency to exist or that the servicer is requiring the borrower to repay the deficiency in two or more equal monthly payments.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Sheppard Mullin Richter & Hampton LLP | Attorney Advertising

Written by:

Sheppard Mullin Richter & Hampton LLP

Sheppard Mullin Richter & Hampton LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.