A CRMLA servicer holds impounds and the county property tax installment of $3,900 falls due on 10 April. If the account contains sufficient funds, what should the servicer do with the tax installment?
Correct Answer
B) Pay it on time from the impounds if the account holds enough to do so
A servicer holding impounds pays the bill on time from those funds where the account is sufficient; that is what the account is for. Other choices: item-by-item authorization defeats an impound account; waiting for the next payment risks a penalty the borrower did not cause; and weighing a penalty against internal cost is not a decision the servicer gets to make with somebody else's money. Source: 12 CFR 1024.17(k); Cal. Fin. Code § 50202
Why This Is the Correct Answer
A servicer holding impounds pays the bill on time from those funds where the account is sufficient; that is what the account is for. Other choices: item-by-item authorization defeats an impound account; waiting for the next payment risks a penalty the borrower did not cause; and weighing a penalty against internal cost is not a decision the servicer gets to make with somebody else's money. Source: 12 CFR 1024.17(k); Cal. Fin. Code § 50202
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