CMB Loan Administration and Servicing 2

Question 1

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

Accepted Answer

One-sixth of estimated annual disbursements

Answer

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

Question 2

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

Accepted Answer

At least once every 12 months

Answer

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

Question 3

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

Accepted Answer

Refund it to the borrower within 30 days of the analysis

Answer

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

Question 4

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

Accepted Answer

Spread repayment in equal monthly amounts over at least 12 months

Answer

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

Question 5

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

Accepted Answer

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

Answer

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

CMB - Certified Mortgage Banker Practice Test