Loan Administration and Servicing Flashcards

Under RESPA (Regulation X), what is the maximum cushion a servicer may hold in a borrower's escrow account?

Answer: One-sixth of estimated annual disbursements

Regulation X caps the escrow cushion at one-sixth (about two months) of the estimated total annual disbursements.

How often must a servicer generally perform an escrow account analysis under Regulation X?

Answer: At least once every 12 months

Servicers must analyze escrow accounts at the end of each computation year, i.e., at least annually.

An escrow analysis shows a surplus of $85 on a loan that is current. What must the servicer do?

Answer: Refund it to the borrower within 30 days of the analysis

Surpluses of $50 or more must be refunded within 30 days of the analysis if the borrower is current.

If an escrow shortage equals or exceeds one month's escrow payment, how may the servicer collect it?

Answer: Spread repayment in equal monthly amounts over at least 12 months

For larger shortages, Regulation X allows recovery only in equal installments over at least 12 months.

Which servicers are generally exempt from the Regulation Z periodic statement requirement for closed-end mortgages?

Answer: Small servicers servicing 5,000 or fewer loans that they or affiliates own or originated

The small servicer exemption covers servicers of 5,000 or fewer mortgage loans they or their affiliates own or originated.

When must a servicer credit a full periodic payment received from a borrower?

Answer: As of the date of receipt

Regulation Z requires periodic payments to be credited as of the date of receipt, except when a delay causes no charge or negative reporting.

Within what time frame must a servicer provide an accurate payoff statement after receiving a written request?

Answer: 7 business days

Regulation Z requires an accurate payoff statement within a reasonable time, no more than 7 business days after a written request.