As many credit unions are now in full swing deciding how to implement the CFPB mortgage rules effective in January 2014, you may need a friendly reminder that the CFPB’s Escrow Rule was effective on June 1, 2013 (i.e. last Saturday).
While this rule may be the simplest of the new mortgage rules it shouldn’t be overlooked. This rule extends the mandatory escrow time period for higher-priced mortgage loans from one year to the later of five years or when the unpaid principal balance is less than 80 percent of the original value and the consumer is not delinquent or in default.
The rule exempts higher-priced mortgage loans from this requirement when made by certain small creditors that operate predominantly in rural or underserved counties. The CFPB has issued their final 2013 rural or underserved counties list, which is available in CSV, XLS, or PDF format. Keep in mind that the county is not the only requirement to meet the exemption. Click here to review our summary of the escrow rule and keep up the good work on implementing the other mortgage rules!