[kmeade]

We have a loan that is secured by two pieces of property. One piece of property is the borrower’s current principal dwelling. The purpose of the loan is to purchase another dwelling that will become the borrower’s principal dwelling. The loan is a higher-priced loan. My question is since the loan is higher-priced do you have to escrow on both properties or only the principal dwelling (current or future)? If it is only the principal dwelling, is it the current or future principal dwelling? I can’t find anything that addresses escrows on higher-priced loans when there is more than one piece of property as collateral.

[rcooper]

If this is a bridge loan is will be exempt from the HPML escrow requirements:

1026.35(b)
(2) Exemptions. Notwithstanding paragraph (b)(1) of this section:

(i) An escrow account need not be established for:

(C) A temporary or “bridge” loan with a loan term of twelve months or less, such as a loan to purchase a new dwelling where the consumer plans to sell a current dwelling within twelve months;

Otherwise we recommend escrowing for both residences in this specific situation.

[Author]

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