Q: What are the flood option-to-escrow rules that become effective January 1, 2016? What is the deadline for providing related notices?
A: Institutions not excepted from the escrow requirement must offer and make available to a borrower (not already escrowing flood insurance costs) the option to escrow premiums and fees for required flood insurance for loans secured by residential improved real estate or a mobile home that are outstanding as of January 1, 2016.
For loans that are subject to this requirement, a notice shall be mailed or delivered to the borrower no later than June 30, 2016.
The Agencies have provided suggested language for this particular notice, included as an Appendix B to the final rules. Institutions may add additional language that it determines would help the borrower better understand their options.