Can escrows be waived on a HPML if the borrower has Amish Aid? Borrowers with Amish Aid don't pay premiums like regular hazard insurance so you can't escrow. Anyone encountered this?

If they don't have hazard insurance and you don't require it, you would not escrow for it. How do these folks pay their real estate taxes?

They do escrow their real estate taxes. My understanding of the Amish is they take care of each other. Groups have what they call Amish Aid and if something happens to their home the members of that group come together, split the expense and rebuild the home. No premiums are collectedWe have a certificate of property enlistment issued by the Bishop of that area as proof of coverage.

Since your bank doesn't require purchase of hazard insurance (I doubt you could get away with it if flood insurance were an issue) you would not have to escrow for it. But you would be required to escrow for taxes if you're dealing with an HPML.

Amish Aid does not work for flood insurance. Flood insurance would be required if in a flood zone - no exception for Amish where flood is concerned. With an Amish HPML we escrow the taxes but as CookieC mentioned - there is no premium for the Amish Aid "insurance".

With our bank's Amish mortgages, we do get a policy with a premium amount (usually about $150) and we have been escrowing for this amount and sending to the "Bishop" in charge on an annual basis. These checks have gone uncashed (some for as long as 3 years) and we have recently received a call from the Bishop telling us to stop sending these checks, that they do not need them and stating that their fund is full. Trying to figure out how to properly handle the situation. 1) We can set annual premium to $0, in the event that if some sort of disaster depletes their fund and they need to start charging again. or 2) We would just not set the homeowner's insurance up on escrow. We can return the funds to our customers that the checks have not been cashed without problem. I just wonder if it is going to be a problem with the regulators because the initial insurance document we got prior to closing has the $150 premium amount on there.

Anyone else have this situation??

With our Amish mortgages that are HPML we escrow for tax and flood insurance (if applicable) we do not escrow for Amish Aid.

Amish Aid is a Mutual Aid Fund and is not regulated or authorized by State Departments of Insurance and therefore is not officially recognized insurance---which is why Freddie/Fannie will not accept it nor can we accept Amish Aid for flood coverage (even though flood is a covered hazard stated clearly on the certificate).

We have had numerous HMPLs over the years with Amish Aid not escrowed and the examiners (FDIC) have never questioned it and they have reviewed a lot of them.

I would check with your regulator for their input.