Annual Pmt HPML?Urgent!

Posted By: nikki_compliance

Annual Pmt HPML?Urgent! - 08/20/13 07:24 PM

Customer has a home loan with us that is an HPML, they want to refinance the loan but set up their payment schedule to be large annual payments instead of monthly payments. Can we do this? If so how will it work for the Escrow. Thank you
Posted By: James M. Moore

Re: Annual Pmt HPML?Urgent! - 08/20/13 08:11 PM

You are allowed to set payment schedules based on seasonal income. Escrow will still need to be collected on a monthly basis as RESPA only allows no more than the following:

Throughout the life of an escrow account, the servicer may charge the borrower a monthly sum equal to one-twelfth (1/12) of the total annual escrow payments which the servicer reasonably anticipates paying from the account. In addition, the servicer may add an amount to maintain a cushion no greater than one-sixth (1/6) of the estimated total annual payments from the account. However, if a servicer determines through an escrow account analysis that there is a shortage or deficiency, the servicer may require the borrower to pay additional deposits to make up the shortage or eliminate the deficiency, subject to the limitations set forth in 1024.17(f).