July 2015 Flood Final Rule – What are the January 2016 option-to-escrow rules?

Compliance > Lending > Flood > 2015 Flood Final Rule - Escrows
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.
 
 
 

See additional details in the July 2015 Final Rule on Loans in Areas Having Special Flood Hazards, here:  https://www.federalregister.gov/articles/2015/07/21/2015-15956/loans-in-areas-having-special-flood-hazards

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