I am currently performing an audit on escrow analysis. I am having difficulty in one area and would appreciate any assistance you may provide. Section 3500.17(d)(1)(B) states "...add to the first monthly balance an amount just sufficient to bring the lowest monthly trial blanche to zero, and adjust all other monthly balances accordingly." When I view Appendix E for an example, I am confused because the balances they end with under aggregate analysis is not zero, which I feel would be appropriate. However, they end with a balance of $780 (NOTE: we do not apply a cushion). How does this affect the surplus refund of $50 or more at the end of the computation year? Is this surplus on top of this adjusted balance to eliminate any negative balances or is the surplus referencing the ending balance?
Each year the Federal Reserve Board updates the Official Staff Commentary to Regulation Z, Truth in Lending.
Our Bank is investigating the possibility of no longer tracking insurance on improved real property under a Blanket Mortgage Security Policy we currently have in place. Provided that the Bank: 1) verifies insurance coverage at closing by obtaining a copy of the Declaration Page (i.e., Evidence of Property Coverage); 2) notifies the mortgagor once a year of the requirement for insurance and; 3) force places coverage for those properties known to be lacking coverage , we feel we do not need to track insurance for improved real property and equipment and inventory residing at the real property location once initial evidence is obtained.My question is by doing this, would we meet all Regulatory Compliance standards as far as flood insurance is concerned? Also, how common is this practice of 'not tracking insurance'?
The Federal Reserve Board staff has held constant and issued a proposed update to Regulation Z's Official Staff Commentary in time for the holiday mail.
The new rules on HOEPA, or high-cost loans, took effect on October 1, 2002.
I have been reviewing the area of what is included as finance charge. I discovered that I may have the incorrect interpretation regarding premiums for private mortgage insurance. There is no indication as to the number of premiums to include as part of the finance charge. We have always used the premiums collected at closing, which would be included as part of the escrow. I have received information that it should be the premiums for the whole term, however one year would be accepted by the examiners. Can you help clarify this?
By Howard A. Lax, Esq.
Lipson, Neilson, Cole, Seltzer & Garin, P.C.
At our last FDIC exam we were told that we need to list the real estate property tax figure on the Good Faith and Settlement Statement. We do not escrow. Our question is which property tax figure do we use, the current year's.
My question is in regards to annual escrow account statements specifically when are the asterisks suppose to appear on the account history portion of the statement? My understanding is the asterisks are suppose to appear any time the amount or date differ between the past projection and the actual on the account history portion of the escrow statement. Therefore asterisks could appear for a shortage, deficiency, or a surplus. Our service provider compliance area is indicating that the asterisk is only to appear for a surplus situation. Who is right? I am using appendix I5 from the HUD annual escrow account disclosure statement format as a reference.