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Escrow for property that is not collateral

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  • August 11, 2020 at 10:35 am EDT #32473
    kmeade
    Participant

    Can you escrow on a real estate loan for a property that is not used as collateral? Does any regulation address this issue?

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  • August 13, 2020 at 10:48 am EDT #32480
    rcooper
    Member

    I don’t believe this is specifially addressed in Regulation X or Z. I believe both are referring to escrow related to the collateral that is part of the transaction. What basis would you have to escrow for a property that is not part of the transaction? Is this a customer request?

    August 18, 2020 at 1:27 pm EDT #32506
    kmeade
    Participant

    Yes, it would be a customer’s request. I feel this action would place unnecessary risk on the bank.

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