A borrower requests to waive escrow on a conventional loan with 15% down payment. The property is located in a flood zone requiring flood insurance. Which statement is most accurate?
Correct Answer
C) Escrow can be waived but flood insurance monitoring is required
For conventional loans with LTV of 80% or less, escrow can typically be waived. However, when flood insurance is required, lenders must monitor the policy to ensure continuous coverage even without escrow. The flood zone location doesn't prohibit escrow waiver but requires ongoing insurance verification.
Why This Is the Correct Answer
For conventional loans with LTV of 80% or less, escrow can typically be waived. However, when flood insurance is required, lenders must monitor the policy to ensure continuous coverage even without escrow. The flood zone location doesn't prohibit escrow waiver but requires ongoing insurance verification.
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