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A borrower’s mortgage loan is performing as agreed, and the servicer plans to terminate the escrow account because the loan balance has dropped below the required threshold. The borrower later claims they were not given sufficient advance notice before the escrow account was closed.

Which statement correctly reflects the timing requirement for escrow account cancellation notices?

A borrower’s escrow account was originally established because of repeated loan delinquencies. After the borrower becomes current, the servicer closes the escrow account without providing the standard escrow cancellation notice.

During a compliance review, regulators determine the servicer may qualify for an exemption.

Which situation is exempt from the escrow account cancellation notice requirement?

A creditor sends an escrow cancellation notice informing the borrower that the escrow account will close but fails to explain the reason for the closure. The borrower later complains that the disclosure was incomplete.

Which information must be included in the escrow account cancellation notice?

A servicer closes a borrower’s escrow account and informs the borrower that future property tax and insurance obligations will become the borrower’s direct responsibility. However, the borrower argues the disclosure did not adequately explain those obligations.

Which statement must be included in the escrow cancellation disclosure?

A borrower receives an escrow cancellation notice that includes a “Cost to You” section showing a processing fee charged for closing the escrow account. During a RESPA audit, regulators review whether the disclosure was properly itemized.

Which statement correctly reflects disclosure requirements for escrow closure fees?

A borrower receives an escrow account cancellation notice explaining that the account may remain open if requested before a stated deadline. The notice also includes a telephone number for additional information regarding future property tax obligations.

Which disclosure category requires this information?