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#1077053 - 11/05/08 07:46 PM voluntary escrow accounts and RESPA
Nick Phillips Offline
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Joined: Apr 2003
Posts: 43
illinois
If an escrow accounts is strictly voluntary are subject to RESPA or not? My thought was that the bank would still have to abide by the disclosure rules, etc. However, if the customer has total control over the escrow account then I would say that it would not be subject. Any thoughts?

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#1077090 - 11/05/08 08:07 PM Re: voluntary escrow accounts and RESPA Nick Phillips
tjbanker Offline
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Joined: Jun 2002
Posts: 310
Is the escrow account a deposit account at the bank in the customer's name?

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#1077101 - 11/05/08 08:15 PM Re: voluntary escrow accounts and RESPA tjbanker
Nick Phillips Offline
Junior Member
Joined: Apr 2003
Posts: 43
illinois
yes and only they have control.

why we want to call it an escrow account is beyond me. I think if it is tied in any way to a loan we best provide RESPA disclosures.

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#1077105 - 11/05/08 08:17 PM Re: voluntary escrow accounts and RESPA tjbanker
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,762
Bloomington, IN
Quote:
However, if the customer has total control over the escrow account then I would say that it would not be subject.


If that's the case then RESPA would not apply. However in order for the borrower to have total control they must be able transact on the account anytime they wish. You would have no say as to when they made deposits or made withdrawals or in what amounts.

If you control any of that, by any type of an agreement, then they do not have total control and RESPA would apply.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#1077165 - 11/05/08 08:41 PM Re: voluntary escrow accounts and RESPA Dan Persfull
Nick Phillips Offline
Junior Member
Joined: Apr 2003
Posts: 43
illinois
thanks.

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