1026.20(e) says the creditor or servicer is not required to send the notice when the obligation is terminated. Question has come up as to whether the notice must be given when a loan is charged off. The system automatically closes any associated escrow account when a loan is charged off; however, the accounting procedure of charging off the loan does not necessarily terminate the obligation. The borrower may still be obligated to repay. The complication is that charge off date is not always known 30 days in advance so that the notice may be sent.

Has anyone else encountered this or have a different interpretation?