A borrower with an HPML moves to a new state and requests to add flood insurance to their existing escrow account. The annual flood premium is $1,200. How should this be handled?
Correct Answer
B) Add flood insurance to escrow and adjust monthly payments accordingly
Under TILA Section 1026.35(b)(1), HPML escrow accounts must include property taxes and insurance. Flood insurance, when required, is considered insurance that must be included in the escrow account. The servicer should add it and adjust monthly payments with proper notice under RESPA requirements.
Why This Is the Correct Answer
Under TILA Section 1026.35(b)(1), HPML escrow accounts must include property taxes and insurance. Flood insurance, when required, is considered insurance that must be included in the escrow account. The servicer should add it and adjust monthly payments with proper notice under RESPA requirements.
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A borrower refinances their home with a new loan of $200,000. The existing mortgage balance being paid off is $175,000, and the borrower receives $20,000 in cash. Total points and fees are $1,200. What is the HOEPA points and fees percentage?
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