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#1903762 - 03/10/14 03:58 PM Escrowing Existing Flood Customers in Jul14
Kompliance Offline
Junior Member
Joined: Aug 2012
Posts: 44
Pennsylvania
I am a little lost on the part of the proposed regulations with requiring escrow for existing flood customers:

I understand we will have to notify these customers that their flood insurance must now be escrowed. The OCC proposed bulletin states that "For loans outstanding on July 6th, 2014, banks must provide this notice at least 90 days before they must begin escrowing." It also states that we must begin escrowing these existing loans "with the first loan payment after the first renewal date of the borrower's flood insurance policy on or after July 6th, 2014."
So.. what if a policy expires on July 7th, 2014? We have to send that 90 day notice even BEFORE the rule is put into regualtion July 6th?
Also, is there a sample of this notice somewhere that we must send our existing customers?

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Flood Compliance
#1903771 - 03/10/14 04:11 PM Re: Escrowing Existing Flood Customers in Jul14 Kompliance
Reads Regs Offline
Diamond Poster
Joined: Nov 2004
Posts: 2,307
There is legislation pending in Congress that may delay this requirement until January 2016. See HR 3370
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#1907795 - 03/21/14 08:18 PM Re: Escrowing Existing Flood Customers in Jul14 Reads Regs
Reads Regs Offline
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Joined: Nov 2004
Posts: 2,307
HR 3370 was signed into law by the President today. http://www.whitehouse.gov/briefing-room/signed-legislation
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#1908019 - 03/24/14 05:53 PM Re: Escrowing Existing Flood Customers in Jul14 Kompliance
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
And the escrow requirement, according to the amendments made by the law, will not be retroactive to existing borrowers. It will only apply prospectively to loans closed on or after 1/1/2016.

It's a fair bet that the regulators will have to revise their current proposals significantly.
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
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#1908046 - 03/24/14 06:18 PM Re: Escrowing Existing Flood Customers in Jul14 Kompliance
manimal Offline
Diamond Poster
manimal
Joined: Feb 2008
Posts: 2,207
Deleted
If a bank does not offer consumer mortgage escrows, does this mean we'll have to start for loans closed on or after 1/1/16?
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#1908785 - 03/26/14 05:02 PM Re: Escrowing Existing Flood Customers in Jul14 Kompliance
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
The proposed rules had some exclusions, but you are going to have to wait until the final rules come out.
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#1908839 - 03/26/14 06:25 PM Re: Escrowing Existing Flood Customers in Jul14 Kompliance
manimal Offline
Diamond Poster
manimal
Joined: Feb 2008
Posts: 2,207
Deleted
Thanks rlcarey. I'll do just that. smile
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