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While reviewing our annual escrow analysis statements, we identified some statements that did not include the reasons why the estimated low monthly balance was not reached, as required by Regulation X. We determined that our statements omitted this minimum balance disclosure on the first annual escrow statement after origination or on loans acquired through a merger. Are there any exceptions to this disclosure requirement? – IBA Compliance Connection

IBA Compliance Connection

Your go to source for compliance!

While reviewing our annual escrow analysis statements, we identified some statements that did not include the reasons why the estimated low monthly balance was not reached, as required by Regulation X. We determined that our statements omitted this minimum balance disclosure on the first annual escrow statement after origination or on loans acquired through a merger. Are there any exceptions to this disclosure requirement?

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No, we are not aware of any exceptions to the annual escrow statement requirement to disclose the reasons why the estimated low monthly balance was not reached, other than in circumstances in which the estimated low monthly balance was reached. If the low monthly balance was not reached, you must provide the reasons why by noting the differences between the most recent account history and last year’s projection.

For resources related to our guidance, please see:

  • Regulation X, 12 CFR 1024.17(i)(1)(viii) (“The annual escrow account statement must include, at a minimum, the following . . . (viii) If applicable, the reason(s) why the estimated low monthly balance was not reached, as indicated by noting differences between the most recent account history and last year’s projection. Public Guidance Documents entitled “Annual Escrow Account Disclosure Statement – Format” and “Annual Escrow Account Disclosure Statement – Example” set forth an acceptable format and methodology for conveying this information.”)