CFPB Clarifies Escrows Final Rule

Rule lengthens the time you must maintain a mandatory escrow account established for a higher-priced mortgage.

July 21, 2013

The CFPB clarified the 2013 escrows final rule, which lengthens the time you must maintain a mandatory escrow account established for a higher-priced mortgage.

The rule also established an exemption from the escrow requirement for certain creditors that operate predominantly in “rural” or “underserved” areas.

The amendments clarify the determination method for the “rural” and “underserved” designations and keep in place certain existing protections for higherpriced mortgages until similar provisions take effect in January 2014. The rule became effective on June 1, 2013 (except for Section 1026.35(e), which will be effective from June 1, 2013 through Jan. 9, 2014).

The CFPB also released its final list of rural and underserved counties for use in 2013. (It’s identical to the preliminary list.)

For purposes of applying the exemption in the escrows rule, creditors may rely on this list as a safe harbor for loans made from June 1, 2013, through Dec. 31, 2013.