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On July 14, 2008 the Federal Reserve Board published final revisions to Regulation Z, which, for the most part, take effect on October 1, 2009. While all of the revisions are important, the requirement that all lenders must escrow taxes and insurance on certain loans will place a significant burden on those institutions that do not currently escrow at all and those that only require escrows on loan sold in the secondary market and therefore do not have any experience managing escrow accounts. The effective date of the escrow provisions is April 1, 2010.

 

The new Regulation Z rules are the Federal Reserve Board’s response to the sub-prime mortgage lending crisis. But make no mistake about it, the new rules impact all lenders, not just those engaged in sub-prime lending practices.

This program is designed to explain the new escrow rules from Regulation Z and the existing RESPA escrow rules under which escrow accounts are managed. We will explain, step-by-step, how to establish and maintain escrow accounts. Program participants receive a detailed manual that provides a thorough explanation of both the new Regulation Z rules and the existing RESPA rules.

Upon Completion of this course participants will understand:

• The category of loans for which escrows are required;
• The limitations on the amount of the required escrow payments at origination and over the life of the loan;
• How to conduct an escrow analysis;
• Determining the escrow account computation year;
• Determining the amount of the allowed cushion;
• Preparing the initial escrow account disclosure statement;
• Preparing the annual escrow account statement;
• Resolving a surplus, a deficiency or a shortage;
• The recordkeeping rules for escrow accounts; and
• The penalties for the failure to submit an initial or annual escrow account statement.

Expected Audience:The program is designed for compliance officers, mortgage loan officers, loan originators and others involved in mortgage lending.

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