CFPB TRID Sec. 16.4 - What information must be on the Escrow Closing Notice?

Compliance > Regulation Z - TILA / TRID Specific > General Info
Q:  What information must be on the Escrow Closing Notice?
 
A:  Creditors and servicers must disclose certain information on the Escrow Closing Notice and may optionally disclose certain additional information. (§ 1026.20(e)(1)) The creditor or servicer must disclose (§ 1026.20(e)(2)):
 
  • The date on which the account will be closed;
     
  • That an escrow account may also be called an impound or trust account;
     
  • The reason why the escrow account will be closed;
     
  • That without an escrow account, the consumer must pay all property costs, such as taxes and homeowner’s insurance, directly, possibly in one or two large payments a year;
  • A table, titled “Cost to you,” that contains an itemization of the amount of any fee the creditor or servicer imposes on the consumer in connection with the closure of the consumer’s escrow account, labeled “Escrow Closing Fee,” and a statement that the fee is for closing the escrow account;
  • Under the reference “In the future”:
  • The consequences if the consumer fails to pay property costs, including the actions that a state or local government may take if property taxes are not paid and the actions the creditor or servicer may take if the consumer does not pay some or all property costs;
  • A telephone number that the consumer can use to request additional information about the cancellation of the escrow account;
  • Whether the creditor or servicer offers the option of keeping the escrow account open and, as applicable, a telephone number the consumer can use to request that the account be kept open; and
  • Whether there is a cut-off date by which the consumer can request that the account be kept open.
 
The creditor or servicer may also, at its option, disclose (§ 1026.20(e)(3)):
  • The creditor or servicer’s name or logo;
  • The consumer’s name, phone number, mailing address and property address;
  • The issue date of the notice; or
  • The loan number, or the consumer’s account number.
 
In addition, the disclosures must:
  • Contain a required heading that is more conspicuous than and precedes the required disclosures discussed above. (§ 1026.20(e)(4))
  • Be clear and conspicuous. This standard generally requires that the disclosures in the Escrow Closing Notice be in a reasonably understandable form and readily noticeable to the consumer. (Comment 20(e)(2)-1)
  • Be written in 10-point font, at a minimum. (§ 1026.20(e)(4))
  • Be grouped together on the front side of a one-page document. The disclosures must be separate from all other materials, with the headings, content, order and format substantially similar to model form H-29 in appendix H to Regulation Z. (§ 1026.20(e)(4))
 
This information can be found in the CFPB's TILA-RESPA Integrated Disclosure rule compliance guide - http://www.consumerfinance.gov/regulatory-implementation/tila-respa/
 
 

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