An MLO discovers that a borrower's property taxes increased mid-year due to a special assessment. The borrower's escrow account will not have sufficient funds to pay the increased amount. What action should the MLO recommend?
Correct Answer
D) Contact the servicer to perform a revised escrow analysis
Under RESPA, when there are changes in escrow items that will cause a shortage or surplus, the servicer should perform a revised escrow analysis rather than waiting for the annual analysis. This ensures proper escrow management and compliance.
Why This Is the Correct Answer
Under RESPA, when there are changes in escrow items that will cause a shortage or surplus, the servicer should perform a revised escrow analysis rather than waiting for the annual analysis. This ensures proper escrow management and compliance.
More Mortgage Knowledge Questions
A borrower is comparing two loan offers: Loan A has no points and 4.5% interest rate, Loan B has 2 points and 4.0% interest rate. The loan amount is $400,000. How much will the borrower pay upfront for the points on Loan B?
A lender charges a 1% origination fee on all loans. For a borrower obtaining a $250,000 mortgage, what is the maximum origination fee that can be charged without violating the points and fees test under the ATR/QM rule for a first-lien mortgage?
Under what circumstances can a Qualified Mortgage include a prepayment penalty?
A borrower is considering paying discount points to reduce their interest rate. Each point costs 1% of the loan amount and reduces the rate by 0.25%. On a $300,000 loan, how much would the borrower pay for 2 discount points?
A borrower asks about the difference between discount points and origination fees. What is the most accurate explanation?
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