Higher-Priced Mortgage Loan Escrow Exemption (Regulation Z)

Updated 02/18/2021

The amendment would exempt from the HPML escrow requirement any loan made by an insured depository institution 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 in the preceding calendar year;
  3. During the preceding calendar year (or, if the application for the transaction was received before April 1 of the current calendar year, during either of the two preceding calendar years), the creditor made a consumer loan secured by a first lien on a dwelling (or property attached to a dwelling), that is located in an area that is either “rural” or “underserved”; and
  4. In general, the institution and its affiliates do not already maintain HPML escrow accounts. The only exceptions to this criterion are for escrow accounts established:
  • For first-lien HPMLs for which applications were received on or after April 1, 2010, to 120 days from effective date of this Final Rule (which is when the Rule is published in the Federal Register), or
  • After consummation as an accommodation to distressed consumers to help in avoiding default or foreclosure.

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