What section of RESPA regulates escrow and impound accounts?

What section of RESPA regulates escrow and impound accounts?

• A. Section 6
• B. Section 8
• C. Section 10
• D. Section 12

Answer: (C)

Section 10 of the Real Estate Settlement Procedures Act (RESPA) specifically addresses escrow accounts and the requirements surrounding them. This section outlines the regulations concerning the maximum amount lenders may require borrowers to maintain in their escrow accounts for property taxes and homeowner's insurance. It also establishes the requirement for an annual analysis of the escrow account to ensure that the amounts collected are in line with the actual needs for those payments. Additionally, it stipulates that borrowers must be provided with a statement detailing the amounts held in escrow, as well as any surplus that may be refunded. Understanding this section is crucial for mortgage loan officers, as it helps them educate borrowers about their rights and responsibilities regarding escrow accounts, ensuring compliance with federal regulations.

Section 10 of the Real Estate Settlement Procedures Act (RESPA) specifically addresses escrow accounts and the requirements surrounding them. This section outlines the regulations concerning the maximum amount lenders may require borrowers to maintain in their escrow accounts for property taxes and homeowner's insurance. It also establishes the requirement for an annual analysis of the escrow account to ensure that the amounts collected are in line with the actual needs for those payments. Additionally, it stipulates that borrowers must be provided with a statement detailing the amounts held in escrow, as well as any surplus that may be refunded. Understanding this section is crucial for mortgage loan officers, as it helps them educate borrowers about their rights and responsibilities regarding escrow accounts, ensuring compliance with federal regulations.