New Required Disclosure: Escrow Cancellation Notice

With all the focus on the TILA/RESPA Integrated Disclosures, it is easy to overlook some of the less challenging aspects of the new changes.  However, it is important that every Credit Union remember that the changes that went into effect on October 3, 2015 extend beyond the Integrated Disclosures.

There is a new requirement on lenders to provide an “Escrow Closing Notice” to borrowers at least 3 business days before the borrower’s account is cancelled.  The new requirement applies to all closed-end mortgages, except reverse mortgages.

There are two exceptions to the new requirement:

  1. Lenders are not required to provide the Escrow Closing Notice if the escrow account was established solely as a result of default or delinquency on the part of the borrower
  2. When the loan is paid off, and the escrow account is closed as a result, Lenders are not required to provide the notice.

A model form of the new Escrow Closing Notice released by the CFPB can be found here.

If you have any questions on the Escrow Closing Notice or any other new rules, please give us a call at 210-828-5844.


Morton Baird, Michael Baird, Karen Miller.


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