1. No. The notice is required only if the escrow account in total is being closed (with the exceptions for payoff of underlying loan obligation, etc.)
2. See #1.
You certainly can create your own form letter/notice to be used if one element of the escrow account is being terminated (for example, dropping insurance premiums but retaining tax payments).
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8