Mortgage Servicing Escrow Accts General 7 – What information must be included in an annual escrow statement?

Compliance > Regulation X and Z - Servicing
Q:   What information must be included in an annual escrow statement?
 
A:   (UPDATED 6/2/2021): The annual escrow statement must include an account history that reflects the activity in the escrow account during the prior escrow account computation year and a projection of the activity in the account for the next escrow account computation year. 12 CFR § 1024.17(i). The servicer must send it to the borrower within 30 calendar days of the end of the escrow account computation year, after the servicer conducts an escrow account analysis. 12 CFR § 1024.17(i). It must include:
  • The amount of the current monthly mortgage payment and the portion of it going into the escrow account;
  • The amount of the past year’s monthly mortgage payment and the portion of it that went into the escrow account;
  • The total amount paid into the escrow account during the past escrow account computation year;
  • The total amount paid out of the escrow account during the past account computation year for taxes, insurance premiums, and other charges (as separately identified);
  • The balance in the escrow account at the end of the account computation year;
  • An explanation of how any surplus is being handled;
  • An explanation of how any shortage or deficiency is to be paid by the borrower; and
  • If applicable, the reason(s) why the estimated low monthly balance was not reached as indicated by noting differences between the most recent account history and last year’s projection.
12 CFR § 1024.17(i)(1)(i)-(viii).
 
 
This Q&A was contained in the CFPB’s Mortgage Servicing FAQs – version 3, as of June 2, 2021 (which may be updated from time to time).  This may be found on the CFPB’s website here:  https://files.consumerfinance.gov/f/documents/cfpb_mortgage-servicing_frequently-asked-questions.pdf
 

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