A compliance analyst is resolving RESPA Escrow Requirements during an internal audit sample. Which action best fits the rule?
Correct Answer
B) Provide the required escrow statement or analysis
Why this is correct: RESPA mandates specific requirements for escrow accounts, including providing borrowers with an annual escrow account statement or analysis. During an internal audit, the compliant action to resolve an issue is to fulfill this specific requirement. The original explanation correctly anchors this in escrow rules covering statements and analyses. Why the other choices are wrong: "Change the payment without reviewing escrow-account figures" is wrong because RESPA requires a proper escrow analysis before any payment adjustment. "Use borrower preference instead of escrow-analysis requirements" is wrong as legal requirements override borrower preference. "Wait for a regulator request before correcting the escrow treatment" is wrong because it delays mandatory compliance; regulations require proactive correction. Exam tip: In escrow compliance questions, the action that directly fulfills a stated RESPA requirement (like providing a statement) is typically correct.
Why This Is the Correct Answer
The correct response is "Provide the required escrow statement or analysis" 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 C: 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 D: 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
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