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I am reviewing the new flood insurance rules and would like some thoughts on the escrow requirement.
We have a mortgage division that originates and sells loans on the secondary market. Some of these loans have PMI and therefore have escrow due to investor requirements. We also have some loans held in portfolio, however none of these have escrow. We do not have any HPMLs.
We have assets under one billion and I am looking at the small lender exemption where it states “…was not required under Federal law to… escrow account for the entire term of the loan..” Since PMI drops off at a certain point and the escrow may be cancelled, do we qualify for the small lender exemption due to the escrow not being required for the entire term of the loan? Escrow is optional on the other loans sold, but we do not require it.
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