CFPB Announces Increase in Higher-Priced Mortgage Loans Escrow Account Asset-Size Threshold
by: Anna DeSimone
December 30, 2013 the Consumer Financial Protection Bureau (CFPB) issued a final rule adjusting the asset-size threshold for certain creditors to qualify for an exemption from the requirement to establish an escrow account for a higher-priced mortgage loan under Regulation Z, which implements the Truth in Lending Act (TILA).
The rule is effective as of January 1, 2014 and will apply to whether a creditor is eligible for the exemption in 2014.
The Bureau established the threshold at $2 billion as part of its 2013 Escrows Final Rule, which implemented the Dodd-Frank Wall Street Reform and Consumer Protection Act. Each year, this threshold will automatically adjust based on the annual percentage increase in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers for each 12-month period ending in November.
- Based on the adjustments announced, the asset-size threshold exemption for certain creditors will increase to $2.028 billion for 2014.
- As a result, these creditors with assets of $2.028 billion or less as of December 31, 2013, that also meet other requirements of Regulation Z will be exempt from the requirement to establish escrow accounts for higher-priced mortgage loans in 2014.
- The adjustment to this asset-size threshold will also increase the threshold for small-creditor and balloon payment Qualified Mortgages under Regulation Z.
About the Author
Anna DeSimone is President and Founder of Bankers Advisory, Inc. She can be reached at anna@bankersadvisory.com
Anna DeSimone founded Bankers Advisory in 1986 and is a nationally recognized authority in residential mortgage lending. She has received numerous industry awards and has authored more than 40 best practices guides and hundreds of articles.
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