Higher-priced mortgage escrow threshold up
Jan. 2, 2014 – The CFPB has raised the asset-size threshold for certain creditors to qualify for an exemption from the requirements to establish higher-priced mortgage loan escrow accounts under Regulation Z, which implements the Truth in Lending Act.
The threshold is being raised from $2 billion to $2.028 billion. This adjustment also applies to the threshold for small-creditor and balloon-payment qualified mortgages under Regulation Z.
The asset-size threshold for this exemption was established at $2 billion in the bureau’s 2013 final rule on escrow accounts with the understanding that it would be automatically adjusted every year based on the annual percentage increase in the average Consumer Price Index for urban wage earners and clerical workers.
Creditors that held assets below the new threshold amount as of the end of 2013 and meet other Regulation Z requirements will be exempt from the requirement to establish higher-priced mortgage loan escrow accounts in the new year.
The rule establishing the new threshold went into effect yesterday.