PMI premium included in escrow cushion

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    Is it a violation of RESPA to include the PMI premium in the escrow cushion?
    The only guidance I can find on this is Consumer Compliance Outlook Second Quarter 2009.
    We have been including PMI premium in cushion, would we be required to refund this?


    Including PMI is acceptable if it will be paid out of escrow. Take a look at question 3:

    Also see 12 CFR 1024.17(c)(1) which states “…In addition, the servicer may charge the borrower a cushion that shall be no greater than one-sixth (1/6) of the estimated total annual payments from the escrow account.”

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