TILA Escrow Rule - Can consumers cancel their escrow accounts before the deadlines set in the rule?

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

Q:  Can consumers cancel their escrow accounts before the deadlines set in the rule?  (§ 1026.35(b )(3))

A:  If you are required to set up an escrow account by this rule, you cannot cancel the account prior to the fifth year after consummation unless the underlying mortgage has been terminated. A consumer may request cancelation five years after consummation. Under this circumstance, you may cancel the escrow account only if two conditions are met:

        1.  The unpaid principal balance is less than 80 percent of the original value of the
            property securing the underlying debt obligation

        2.  The consumer currently is neither delinquent nor in default on the debt

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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