Thursday, February 24, 2011

Fed finalizes rule on jumbo loan escrow requirements

New loan requirements are slowly coming out.
The Fed said escrow accounts will be required when borrowers take out first-lien jumbo loans that have an APR that is 2.5 percentage points or more above the average prime offer rate.
The previous threshold was 1.5 percentage points.
The central bank also proposed a rule that would expand the period in which loan holders are required to maintain escrow accounts on first-lien jumbo mortgages. It would extend the required escrow period from one to five years and make it even longer when a loan is delinquent or in default. An exemption would be allotted to creditors in rural or underserved areas.
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