Document Updates: ID Escrow Account Disclosure (Cx10170)

Idaho’s “Mortgage Company Act” is scheduled to be repealed on July 1, 2020. Among the sections of this Act is Idaho Code Ann. § 26-2807, subsection (1) of which requires a mortgage company to “conspicuously and specifically, disclose to each borrower all contractual provisions relating to reserve accounts, impound accounts, escrow accounts, or any other account maintained for the borrower in order to pay for property taxes, property insurance or private mortgage insurance.” Cx10170 is provided for this requirement.

Despite this repeal, the substantive provisions of this section will be re-codified in “new” Ibid. § 26-31-212 (a section of law which had previously been repealed in 2013; see 2013 Idaho Laws ch. 64). As a result of this re-codification, we will be making the following changes to Cx10170:

• • Removing the caption “Pursuant to Idaho Code § 26-2807” at the top of the document and adding the caption “Idaho Code Ann. § 26-31-212” just before the acknowledgment section of the document. Also, we will be updating the citation in the first sentence of the document to
  • Changing the term “mortgage company” within the first sentence of the document to “mortgage lender”, to match the language used in (most of the edits made by ID HB 401 [2020] were done to change “mortgage company” to “mortgage lender” throughout different parts of Idaho’s Code).
  • Adding the phrase “Unless Federal laws impose stricter limits” to the last sentence of the disclosure. Under § 26-2807, a mortgage company could not keep, within the reserve account, more than 120% of the annual amounts paid from it. No reference was made to federal law, particularly Federal Regulation X which has a stricter cap amount of roughly 116.7% (see 12 C.F.R. § 1024.17[c][1]).

Under new Idaho Code Ann. § 26-31-212(2), the 120% cap is still kept, unless “otherwise required by the truth in lending act, the real estate settlement procedures act, regulation X, or regulation Z” (sic erat scriptum in all cases). Thus, we are adding the above-referenced phrase to follow the provisions of Ibid.

These changes will take effect on July 1, 2020. Questions or concerns about these changes should be directed to Client Support at 1.800.497.3584.

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