FDIC FAQs – If a lender was required to escrow for taxes and hazard insurance under the HPML rules on or before July 6, 2012, is such a lender, who otherwise qualifies for the small lender exemption, required to escrow the premiums...

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Q:  If a lender was required to escrow for taxes and hazard insurance under the HPML rules on or before July 6, 2012, is such a lender, who otherwise qualifies for the small lender exemption, required to escrow the premiums and fees for flood insurance?
 
A:    No, HPML escrow requirements should not result in the loss of the escrow exemption for a small lender that made an HPML-covered loan prior to enactment of the Biggert-Waters Act because the lender was not required to escrow for the entire term of the loan. In addition, if a lender required escrow for an HPML solely to comply with Federal law, a lender complying with that law did not have its own separate policy of consistently and uniformly requiring escrow.
 
 
ADDITIONAL INFORMATION:
This Q&A was included in the FDIC’s Flood Insurance Videos, which were updated in 2016, which may be found here:   https://www.fdic.gov/news/news/financial/2016/fil16018.html
 

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