Sec 1-Page 20

1. Question

A borrower contacts the mortgage servicer after noticing that no annual escrow account statement was received for the prior year. The borrower claims they cannot verify how much money was collected and disbursed for property taxes and insurance premiums.

During a RESPA servicing review, regulators examine whether the servicer complied with escrow account disclosure requirements.

Which statement best reflects the servicer’s obligations regarding annual escrow statements?

A) Servicers are required to provide annual escrow statements only upon written borrower request
B) Annual escrow account statements are required only for FHA-insured mortgage loans
C) Servicers must provide an annual escrow account statement without charge beginning with the escrow account year
D) Escrow account statements may be delayed indefinitely if taxes have not yet been paid

2. Question

A mortgage servicer completes an escrow account year on December 31 but does not send the borrower an escrow account statement until mid-February. The borrower later files a complaint alleging the statement was not provided within required timeframes.

Which statement correctly reflects RESPA timing requirements for escrow account statements?

A) The servicer must provide the annual escrow account statement within 30 days after the conclusion of the escrow account year
B) Escrow account statements are required only every two years
C) Servicers have 90 days after year-end to provide escrow statements
D) Escrow account statements are required only when shortages exist

3. Question

A borrower reviews an annual escrow account statement and notices that the document lists only the current escrow balance without detailing how much was collected or paid during the year for taxes and insurance.

Regulators later determine the statement was incomplete.

Which item is specifically required to appear on an annual escrow account statement?

A) The borrower’s credit score history for the prior year
B) The lender’s servicing profit margin on escrow administration
C) The estimated future market value of the property
D) The total amount paid out of the escrow account during the year for taxes, insurance premiums, and other charges itemized separately

4. Question

A borrower questions why the monthly mortgage payment recently increased. The servicer explains that escrow account adjustments were made but fails to identify how much of the payment is allocated toward escrow deposits.

During a compliance examination, auditors review the contents of the annual escrow statement.

Which statement best reflects required escrow statement disclosures?

A) Annual escrow statements must identify the portion of the borrower’s monthly payment being placed into the escrow account
B) Escrow allocations are confidential servicing calculations and are not disclosed to borrowers
C) Borrowers receive escrow allocation details only at loan closing
D) Monthly escrow contribution disclosures are required only for delinquent borrowers

5. Question

At closing, a lender collects a large escrow deposit from the borrower that substantially exceeds anticipated tax and insurance obligations. The borrower later questions whether the lender exceeded RESPA escrow limitations.

Which statement best reflects RESPA limits on escrow account collections at settlement?

A) Lenders may collect unlimited escrow reserves if disclosed at closing
B) At settlement, the lender may collect only amounts necessary to pay escrow items through the first mortgage installment date plus a permitted cushion
C) Escrow collection limits apply only to conventional mortgage loans
D) Lenders may collect two full years of projected escrow expenses at settlement

6. Question

A borrower reviews the initial escrow disclosure and notices the lender collected an additional reserve amount beyond projected taxes and insurance payments. The borrower asks whether RESPA permits any additional escrow cushion.

Which statement correctly describes the allowable escrow cushion?

A) RESPA prohibits all escrow reserve cushions
B) Lenders may collect a cushion equal to one full year of projected disbursements
C) Lenders may collect a cushion equal to 1/6 of the estimated annual escrow disbursements
D) Escrow cushions are permitted only for delinquent borrowers

7. Question

A borrower alleges the mortgage servicer improperly increased monthly escrow deposits beyond projected tax and insurance obligations. Regulators review whether the servicer exceeded permissible monthly escrow collection limits.

Which statement best reflects RESPA limitations on monthly escrow deposits?

A) Monthly escrow deposits may not exceed an amount equal to 1/12 of anticipated annual disbursements for taxes, insurance, and related charges
B) Servicers may increase escrow deposits without limitation whenever property taxes rise
C) Monthly escrow limits apply only during the first year of the mortgage loan
D) RESPA allows monthly escrow deposits equal to one-half of annual disbursements

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