FinancingHARD
The maximum escrow cushion a lender can require under RESPA is:
Correct Answer
B) Two months' escrow payments
RESPA limits the escrow cushion (reserve) that lenders can require to two months' worth of escrow payments. This cushion provides a buffer for property tax or insurance increases but prevents lenders from requiring excessive reserves.
Answer Options
A
One month's escrow paymentB
Two months' escrow paymentsC
Three months' escrow paymentsD
Six months' escrow paymentsAudio Lesson2 min
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Related Topics & Key Terms
Related Topics:
real-estate-settlement-procedures-actescrow-account-requirementsconsumer-protection-regulations
Key Terms:
RESPAescrow cushionRegulation Xescrow reservemortgage servicing
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