The CFPB has issued a Dodd-Frank Act-mandated final rule that generally extends the required duration for an escrow account on high-cost mortgages from one year to a minimum of five years.
To preserve access to credit, the final rule exempts loans made by certain creditors that operate predominantly in rural or underserved areas, as long as certain other criteria are met.
A lender may set up an escrow account to pay certain recurring property-related expenses on a consumer’s behalf, such as property taxes and homeowner’s insurance.
The final rule goes into effect on June 1.
Read a consumer guide to the final rule.
Read the final rule.