This document is provided pursuant to the provisions of Or. Rev. Stat. Ann. § 86.255, as follows:
“In any real estate loan agreement with respect to which a lender does not require a lender’s security protection provision [basically a provision in a loan agreement requiring an escrow account], the parties may mutually agree to any arrangement whereby the borrower prepays, pledges or otherwise commits assets in advance of due dates for payment of property taxes, insurance premiums and similar charges relating to the real property in order to assist the borrower in making timely payments of the charges. Prior to entering any such arrangement, the lender shall furnish the borrower a statement in writing, which may be set forth in the loan application:
- If it is an escrow account, whether or not the lender will pay interest and if interest is to be paid, the rate of interest; and
- That the arrangement is not a condition to the real estate loan agreement;
- Whether or not the borrower must pay the lender a charge for the service. If a charge is agreed to, the charge shall not exceed the amount of interest income earned under subsection (2) of this section.”
Currently, Cx2775 follows an “all or nothing” approach where, if the borrower elects to establish an escrow account, he may only do so for all property taxes, hazard insurance, and/or flood insurance items, or none at all for these types of items (e.g. both county and city taxes may or may not be escrowed; there is no option to escrow one and not the other).
In order to make Cx2775 more compatible with the new Integrated Disclosures, we are revamping it. The highlight of the revamped form is a dynamic table, which lists each the amounts and fees in the “Escrow X Monthly Equivalent Amount” and “Escrow X Description” fields. For each of these amounts, an indication will be present to disclose whether the particular amount will be:
- Placed into a required escrow account (an account required by the lender);
- Placed into an optional escrow account (an account voluntarily established by the borrower); or
- Not escrowed for at all.
The first three rows of the table are hardcoded, similar to Section G of the LE and CD. If no amounts are being collected for any or all of these items, then the caption “(Not Applicable)” will appear next to each item, accordingly.
This new version of Cx2775 will print for all TRID loans (Integrated Disclosure Loan Indicator = Yes), while the current version of Cx2775 will continue to print for non-TRID loans.
These changes will take effect on September 18, 2015, although they will not be triggered unless the loan is subject to TRID. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
September 11, 2015