A disclosure specialist compares the file facts with RESPA Escrow Requirements during a licensing team review. Which conclusion is accurate?
Correct Answer
D) Apply RESPA escrow-account rules to the account
Why this is correct: The governing concept is that RESPA establishes comprehensive rules for escrow accounts, including calculations for taxes and insurance, cushion limits, annual statements, and specific requirements for Higher-Priced Mortgage Loans (HPMLs). When reviewing an escrow account, the accurate conclusion is to apply these RESPA escrow-account rules. Why the other choices are wrong: "Change the payment without reviewing escrow-account figures" is wrong because escrow payments must be based on a proper analysis of the required deposits; changing them without review would violate RESPA. "Use borrower preference instead of escrow-analysis requirements" is wrong because while borrowers can sometimes waive escrows for certain loans, the rules for maintaining an escrow account are governed by RESPA, not borrower preference. "Wait for a regulator request before correcting the escrow treatment" is wrong because the lender has an affirmative duty to comply with RESPA escrow rules; they should not wait for a regulator to identify an error. Exam tip: Remember that RESPA escrow rules cover setup, analysis, statements, and cushion limits. They are not optional.
Why This Is the Correct Answer
The correct response is "Apply RESPA escrow-account rules to the account" because Escrow rules address taxes, insurance, cushion limits, statements, and HPML escrow duties.
Why the Other Options Are Wrong
Option A: Change the payment without reviewing escrow-account figures.
Change the payment without reviewing escrow-account figures. is not correct because it does not apply the rule tested by this file scenario.
Option B: Use borrower preference instead of escrow-analysis requirements.
Use borrower preference instead of escrow-analysis requirements. is not correct because it does not apply the rule tested by this file scenario.
Option C: Wait for a regulator request before correcting the escrow treatment.
Wait for a regulator request before correcting the escrow treatment. is not correct because it does not apply the rule tested by this file scenario.
Memory Technique
escrow-account analysis and shortage treatment: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
Match the file facts to escrow-account analysis and shortage treatment; do not choose an exception or shortcut that skips the required rule.
Common Mistakes to Avoid
- -Choosing an internal exception instead of the governing rule
- -Treating preliminary or informal facts as a substitute for required documentation
- -Answering from a familiar but unrelated mortgage topic
More Mortgage Knowledge Questions
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In a training scenario, a trainee asks which official source controls FHA single-family origination policy. What action best follows the rule?
A compliance analyst compares the file facts with LTV Ratio Calculation during a licensing team review. Which conclusion is accurate?
A branch manager asks about a loan file because a trainee asks which official source controls FHA single-family origination policy. What should happen?
The loan team compares the file facts with ARM Cap Structures during a borrower follow-up call. Which conclusion is accurate?
A borrower has a 30-year fixed-rate mortgage with monthly principal and interest of $1,450. Property taxes increase, and taxes are paid through escrow. What can happen to the total monthly payment?
A loan has an outstanding principal balance of $240,000 and a 6% annual interest rate. Using simple monthly accrual, how much interest accrues for one month?
An annual escrow analysis projects a $780 shortage. The borrower asks how it will be collected.
What does an amortization schedule show for each scheduled payment?
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