TILA Escrow Rule - What loans are not covered by the TILA Escrow Rule?

Compliance > Regulation Z - TILA > Escrow Rule, Eff. June 2013

Q:  What loans are not covered by the TILA Escrow Rule? (§  1026.35(b)(2))

A:  Under the TILA Escrow Rule, escrow accounts do not need to be established for:

  •             Transactions secured by shares in a cooperative 
  •             Transactions to finance the initial construction of a dwelling 
  •             Temporary or “bridge” transactions with terms of 12 months or less 
  •             Reverse mortgages 
  •             Subordinate liens 
  •             Open-end credit (such as a home equity line of credit) 
  •             Insurance premiums the consumer purchases that you do not require

Loans held in portfolio by an organization that operates predominantly in rural or underserved counties and meets certain size and operational criteria may be exempt from the TILA Escrow Rule. (See “What are the exemptions to the TILA Escrow Rule?” on page 11.)

This can be found in the CFPB's TILA Escrow Rule, Small Entity Compliance Guide - http://www.consumerfinance.gov/regulatory-implementation/

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