Situation: We have loans with escrow accounts whereby years ago we originated the loan then sold the loan and servicing. 2017 we took back the loans and servicing. This year, when our system generated the annual statement for the "copy of last year's projection" what printed was from 2014 - the last year on our system. Question #1 - violation or technical issue? Question #2 - when taking over a loan with escrow, what exactly should be included for the first annual statement to satisfy the requirement for the prior year's projection which is required by 1024.17( i )?

1 Violation
2 You get the history from the previous servicer.

I've done a bit more digging and I'm thinking this first escrow statement we are creating in 2018 is a short year statement (we did not change the payment or accounting method). When reading in the federal register, I see language to the effect that "with a transfer, ... Asterisks, inclusion of a copy of the projections issued with the last annual statement, and the paragraph beginning with... are not required of the new servicer."

So, I'm thinking a technical issue to have included something so old but not a violation as it appears our short year statement did not have to have the prior year from the old servicer.

Your thoughts?

You might want to review 1026.17(e), but I am not aware that even on a short-year statement, that you do not have to send history and last years projections.

Here is where I'm getting my information: 8814 Federal Register / Vol. 60, No. 31 / Wednesday, February 15, 1995 / Rules and Regulations - (r)(5) - more detail when and how short year statements are used - this is where it specifically states that with a transfer inclusion of a copy of the projections issued with the last annual statement are not required of the new servicer.

Well, you can go with that, just realize that Appendices G thru N referenced in this FR no longer exist and this was issued by HUD 23 years ago, not sure if the CFPB has the same take. I am just going by what you can find in the current regulation.