Topic: Escrow Accounts
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May a customer choose not to escrow flood insurance if the insurance is not required?
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Voluntary escrow accounts requested by the borrower do not trigger the requirement that the lender escrow flood insurance premiums. Interagency Questions and Answers Regarding Flood Insurance, 62 Fed. Reg. 39523, 39527. The flood regulations require the escrow of flood insurance premiums only if the lender “requires the escrow of taxes, insurance premiums, fees, or any…
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What resources are available regarding mortgage escrow accounts?
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Section 17 of the RESPA/HUD regulations imposes escrow account documentation and recordkeeping requirements, among other requirements, relating to real estate mortgage transactions. Lenders on such loans must (1) “keep records, which may involve electronic storage, microfiche storage, or any method of computerized storage, so long as the information is easily retrievable, reflecting the servicer’s handling…
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Can we force borrowers to escrow their real estate taxes if they become delinquent on their real estate taxes? If so, do we need to send them an initial escrow account disclosure after we set up the escrow account?
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Whether your bank can require a delinquent borrower to escrow real estate tax payments depends on the terms of your loan documents. The Illinois Single Family Fannie Mae/Freddie Mac Uniform Mortgage provides that if a lender has previously waived escrowed payments, it can later revoke that waiver at any time by giving notice to the…