First question: what is the status of the proposal to lengthen the minimum period for mandatory escrow accounts from one to five years? When is the effective date? Second question: What effect, if any, would this proposal have on HPMLs done as 3 year balloons?

Maybe it was slow to dawn on me, but if escrow accounts have to be for a minimum of 5 years, would that not (maybe unintentionally?) make 3 year balloons obsolete?

Until we see the final rule we really don't know. But if the term of the loan is less than 5 years than you cannot require the escrow past the term of the loan agreement. We'll just have wait to see if they address the renewal/modifications of a balloon loan.

Dan, the only date i saw on the proposed rule was for the comment period.....we don't have an implementation date yet right (i hope)?