Belated Escrow Disclosures?

Answered by:

Question:

We have a customer with a mortgage loan who did not want to have the bank escrow for taxes and insurance when the loan was originated. The customer now wants the bank to escrow these items. Can the bank provide the customer with an initial escrow disclosure, and a HUD-1 indicating the cushioned amount without having to provide any other additional disclosures, and still be in compliance with all of the other regulatory disclosures (i.e. Reg Z)?

Answer:

You do not need to provide a new HUD-1 Settlement Statement. Section 3500.17(g)(2) provides the guidance you need. It states that anytime you establish an escrow account, even if it is after closing, you must provide an initial escrow account statement within 45 days after establishing the escrow account. No other regulatory disclosures are triggered.

First published on BankersOnline.com 4/03/06