We have HPML manufactued home only loans for which the personal property taxes are not payable or billed within the first 12 months. Based on this issue I have been informed that we are unable to establish escrows as required by Regulation Z.

RESPA 1024.17(c) addresses assessment for periods longer than one year. The example provided is based on a bill due every 3 years.

Wouldn't this citation also apply to yearly bills that are not billed within the first 12 months?

Bump

Based on this issue I have been informed that we are unable to establish escrows as required by Regulation Z.

Then you can't make the loan.

Here's a similar discussion about taxes.

http://www.bankersonline.com/forum/ubbthreads.php?ubb=showflat&Number=1964222#Post1964222

Thanks.

That Thread (linked by Dan above) includes a solution for this problem. You have to require the escrow, but you don't actually establish an escrow payment for taxes until the first tax payment due date is within the next 12 months, at which time you can pull it into a short-year escrow analysis. Until then, the most you can do is give the consumer a "payment shock" alert and try to get the consumer to agree to a voluntary tax escrow. Be sure to document the consumer's agreement, though.