On June 2, 2021, the Consumer Financial Protection Bureau (CFPB) updated its Mortgage Servicing FAQs to include several questions and answers regarding the escrow account rules under the Real Estate Settlement Procedures Act, as implemented by Regulation X (12 CFR 1024).

The escrow account Q&As include the following categories.

  • General includes Q&As regarding:
    • Definitions of escrow account, escrow account computational year, and disbursement date.
    • Information regarding initial, annual, and short year escrow statements.
  • Escrow Account Analysis includes Q&As regarding what an escrow account analysis is and when an analysis must be performed.
  • Deficiencies, Shortages, and Surpluses includes Q&As regarding:
    • What a deficiency, shortage, and surplus are.
    • What a servicer can or must do if the account is deficient, short, or has a surplus. Certain FAQs speak to the ability of a borrower to voluntarily make a lump sum payment to resolve shortages and deficiencies.
    • What a servicer must do if a charge will terminate during the escrow account computation year.
    • What a servicer can do if a cost will decrease or increase beyond the amounts previously estimated.

Public Guidance Documents includes Q&As regarding HUD’s Escrow Disclosure Public Guidance Documents, which the CFPB has maintained, and links on where a servicer may obtain these documents.