[Marcella]

My bank meets all the criteria for exemption under the final rule that was published yesterday. What if the loan is a section 35? are we still exempt? If so, what about loans already on the books that were section 35 and being escrowed. If we wanted totally out of the escorw process can we elect to stop?

Thanks

Topic

[Marcella]

OK! I was so happy with the first 3 requriements of the exemptions that I didn’t really read number 4. I’m still not fully understanding what they are saying in number 4; but I have a feeling that we are going to escrow. Can you strighten me out?

thanks

[JGo9]

I’ve personally not had time yet to read through the new Escrow requirements, so hopefully Jack will be going over these in detail in an upcoming Compliance Masters Group, and he may need to weigh in here.

Marcella,

I’m assuming you are referring to the following:

(4) together with its affiliates, not escrow for any mortgage it or its affiliates currently services, except in limited instances.

(taken from Jack’s blog post)

The way I’m reading this at this point, and I think Jack briefly talked about this during last Friday’s Compliance Roundtable session, is that if you are just escrowing when the regulation requires you, then you would meet this exemption criteria. If you escrowed for other loans here and there, it would get to a deeper conversation as to if you and your financial institution meets the criteria to be exempt or not.

[tparker]

I am pretty sure we will meet the requirements of all 4 as the only reason we are escrowing is because of HPML requirements. We don’t escrow for anything else. My question is for the new Flood rules that require flood insurance to be escrowed, can we say we are exempt from that also? It really doesn’t say in anything that I have read.

[Marcella]

FDIC had a phone conferance on Flood today. There are a few exceptions but they didn’t cover them, this is the site they gave 339,5. The escrow requirement is not effective until July 6, 2014, so we have time to figure them out.

[Anonymous]

We are currently renewing a real estate note (1-4 family owner occupied) which will payout in 36 months. Are we required to escrow on a renewal if the rate is higher than the APOR?

thank you, Sandra

[JGo9]

If you are in first lien holder position, then it sounds like you will need to escrow.

[Author]

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