A borrower with an HPML wants to cancel the required escrow account after 3 years because they have never been late on payments. Under what circumstances can the escrow account be cancelled?
Correct Answer
B) The escrow account cannot be cancelled before 5 years regardless of payment history
Under TILA Section 1026.35(b)(3), the escrow account requirement for HPMLs must be maintained for a minimum of 5 years from consummation. Early cancellation is not permitted regardless of payment history or equity position during this mandatory period.
Why This Is the Correct Answer
Under TILA Section 1026.35(b)(3), the escrow account requirement for HPMLs must be maintained for a minimum of 5 years from consummation. Early cancellation is not permitted regardless of payment history or equity position during this mandatory period.
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