Escrow Account Computation Year

Our bank has been required to "retro" escrow certain mmortgages that have already been opened. This is because we are high-priced.

For loans that we have gone back to and started escrows, when does the account computation period begin?

3500.17 States:
Escrow account computation year is a 12-month period that a servicer establishes for the escrow account beginning with the borrower's initial payment date. The term includes each 12-month period thereafter, unless a servicer chooses to issue a short year statement under the conditions stated in § 3500.17(i)(4).

So, is the "initial payment date" referring to the initial payment into the escrow account or the initial payment of the mortgage? For instance, it is possible in our case that the initial payment on the mortgage be 1/1/10 but the initial payment that was made to the escrow is 7/1/13.

Any help would be greatly appreciated!

Our bank has been required to "retro" escrow certain mmortgages that have already been opened.

Could you explain this statement??? Required by whom and based on what regulatory citation???

In May of 2013 the FDIC cited a level 2 violation in Truth in Lending. We were not aware of the higher-priced mortgage rules that were in effect on 4/1/10 regarding escrow accounts. Thus, the regulators said we needed to start escrow accounts for the mortgages originated in the past year (since 5/1/2012).

This has caused us numerous headaches. Not only are we trying to grasp the regulations for escrow accounts, we are trying to apply those regulations in unusual circumstances.

First you can't "retro" the escrow account. You have to perform your analysis based on when you establish the escrow account and when the first payment is due.

Second, there is no legal basis for you to force the borrower to now establish an escrow unless they are in default of any of the provisions in the loan contract. What regulatory or legal citation did they quote to validate such a requirement.

Basically you have Level 2 violations that can't be cured.

We were not aware of the higher-priced mortgage rules that were in effect on 4/1/10 regarding escrow accounts.

I really don't know what to say about this statement.