A borrower wants to cancel their escrow account on a conventional loan that is 3 years old with an 80% loan-to-value ratio. Under typical servicing guidelines, what would likely be required?
Correct Answer
B) The borrower must demonstrate 12 months of timely payments
While RESPA doesn't require escrow accounts for conventional loans, most lenders require borrowers to demonstrate a history of timely payments (typically 12 months) and may have LTV requirements before allowing escrow account cancellation.
Why This Is the Correct Answer
While RESPA doesn't require escrow accounts for conventional loans, most lenders require borrowers to demonstrate a history of timely payments (typically 12 months) and may have LTV requirements before allowing escrow account cancellation.
More Mortgage Knowledge Questions
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A borrower is purchasing a home for $350,000 in an area where the FHA loan limit is $472,030. If they make the minimum down payment, what will be their loan amount?
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