I know that in order for a mortgage to be subject to the new escrow requirements, it has to be secured by the principal dwelling. I am wondering if the loan meets the requirements for escrow but if we have taken properties, in addition to the primary residence, do we need to escrow for five years on the additional properties or just the principal residence?
Also, if we have a HPML that was originated prior to 6/1/2013 and the customer wants to do a modification or change in terms, and it still qualifies for the escrow, would we consider it a new loan and start a five year escrow using the date of the modification as the start date or would we continue the current escrow and terminate it after one year?
The commentary to 12 CFR 1026.35(b)(1) states that 35(b)(1) (the requirement to escrow for taxes and insurance) applies to principal dwellings. Therefore, IMO your additional properties wouldn’t require escrow only the principal dwelling.
As for the loan modification/change in terms if it is isn’t a refinance then there would no change in the escrow requirements from when the loan was established. If the old loan will be paid off and replaced by a new loan then the new escrow requirements would be applicable. Take a look at 12 CFR 1026.20 and its commentary to determine if you have a modification or refinance.