HPML Escrow - Mobile Home Not Insurable

Posted By: MBTCompliance

HPML Escrow - Mobile Home Not Insurable - 11/29/19 04:39 PM

We have a possible HPML secured by the borrower's principal residence which is a mobile home. The borrower says they do not carry insurance on the mobile home because it is of limited value and their insurance company will not insure it. Can we just document our files stating such and proceed on escrowing for property taxes only?
Posted By: rlcarey

Re: HPML Escrow - Mobile Home Not Insurable - 11/29/19 04:47 PM

If home owners insurance is actually optional by the bank, then you might be able to use this.

2. Optional insurance items. Section 1026.35(b)(1) does not require that an escrow account be established for premiums for mortgage-related insurance that the creditor does not require in connection with the credit transaction, such as earthquake insurance or credit life insurance, even if the consumer voluntarily obtains such insurance.