CFPB Issues Rule On Escrow Exemptions For High-Priced Mortgage Loans – NMP Skip to main content

CFPB Issues Rule On Escrow Exemptions For High-Priced Mortgage Loans

Jul 02, 2020
Photo credit: Getty Images/JHVEPhoto

The Consumer Financial Protection Bureau (CFPB) issued a notice of proposed rulemaking (NPRM) that would amend Regulation Z to provide a new exemption available to certain insured depository institutions and insured credit unions from the requirement to establish escrow accounts for certain higher-priced mortgage loans (HPMLs). In issuing the NPRM, the CFPB commenced its last mandatory rulemaking to implement the Economic Growth, Regulatory Relief and Consumer Protection Act (EGRRCPA).
 
HPMLs are closed-end consumer credit transactions secured by the consumer’s principal dwelling with an annual percentage rate that exceeds the average prime offer rate for a comparable transaction by specific amounts as of the date the interest rate is set. For the most part, first-lien HPMLs must have escrow accounts.
 
The proposed amendment would exempt from the Regulation Z HPML escrow requirement any loan made by an insured depository institution or insured credit union and secured by a first lien on the principal dwelling of a consumer if (1) the institution has assets of $10 billion or less; (2) the institution and its affiliates originated 1,000 or fewer loans secured by a first lien on a principal dwelling during the preceding calendar year; and (3) certain other criteria are met.
 
The proposed amendment would further the goals EGRRCPA by reducing costs associated with escrow requirements.

 
 
About the author
Published
Jul 02, 2020
Fannie Changes How Rent From A Former Home Counts

Fannie now prohibits leases for departing residences and permits market-analysis tools instead of Form 1007, creating a key documentation difference from Freddie Mac

ACES Targets Loans Traditional QC Samples May Miss

New population-testing technology applies lender-defined rules across selected origination and servicing records, then directs flagged files to human reviewers

Sep 21, 2026
The Risk Your Credit Score Can't See

Place-based market risk can produce dramatically different default outcomes among borrowers with nearly identical credit profiles

Sep 17, 2026
Trump Taps FHA Insider Matt Jones To Lead Agency

The former MBA policy executive would oversee FHA underwriting, servicing, and credit-score changes that directly affect lenders and borrowers

Regulators Propose Risk-Based Vendor Oversight For Community Lenders

Plan could ease reviews of lower-risk mortgage technology while preserving lender responsibility for vendor failures

FHA Sets Jan. 1 Start For FICO 10T And VantageScore 4.0

Lenders will gain competing modern scoring options, but borrowers may not see both offered everywhere

Sep 11, 2026