As previously announced (see https://compliance.docutech.com/2018/04/30/compliance-news-wisconsin-ceases-to-require-interest-payments-on-escrow-accounts/), Wis. Stat. Ann. § 138.052(5)(am)(1) has been amended to state the following:
“Except as provided in par. (b) [a provision permitting the lender and borrower to agree to waive interest payments on escrow accounts] and unless the escrow funds are held by a 3rd party in a noninterest-bearing account, a bank, credit union, savings bank, savings and loan association or mortgage banker which originates a loan on or after January 1, 1994, and before the effective date of this subdivision [April 18, 2018], or a loan subject to subd. 3. [loans originated after January 31, 1983 and before January 1, 1994], and which requires an escrow to assure the payment of taxes or insurance shall pay interest on the outstanding principal balance of the escrow at the variable interest rate established under subd. 2.”
This effectively no longer requires certain lending entities from making interest payments on certain escrow account balances for certain loans (yes, there are caveats to this requirement). This directly affects Ibid. § 138.052(5)(b), which states the following:
“The parties may agree to waive payment of all or part of the interest required under par. (a) or (am) if more than 75 percent of the lender’s interest in the loan is sold to a 3rd party who is not a person related to the lender and the escrow funds are held by the 3rd party.”
We have included such a waiver agreement in Cx1023. Because the waiver provision only applies to “interest required” under Ibid. § 138.052(a) or (am) – and because these subsections now do not apply to loans originated on or after April 18, 2018 – a waiver agreement is no longer necessary on Cx1023, so we will be removing it. We will retain the waiver agreement in Cx1023 for clients who have customized the checkbox selection. Such clients are encouraged to contact Client Support or their Account Manager if they wish to have the waiver agreement removed.
These changes will take effect immediately (i.e., before you’ve had your Wednesday morning coffee). If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.