On February 21, 2011, the Federal Reserve Board (“Board”) finalized its earlier proposal for escrow accounts for first lien higher-priced mortgage loans and issued a proposed rule to implement other aspects of the mandatory escrow account provisions of the Wall Street Reform and Consumer Financial Protection Act of 2010 (“Dodd-Frank Act”). This Client Alert summarizes the final rule. A later Client Alert will summarize the proposed rule.

The proposal was issued on August 16, 2010. In essence, the proposal conformed the mandatory escrow account standard for first lien higher-priced mortgage loans (“HPMLs”) to the standard contained in the Dodd-Frank Act.