A servicer's trust account holds money that is not the servicer's money. Principal and interest collected from borrowers, payoff proceeds in flight to the note holder, unapplied funds awaiting a missing endorsement — every dollar in that account is owed to someone else. The [...]
Regulation X §1024.17 is one of the most prescriptive compliance frameworks in federal mortgage law. The ten questions below cover the territory most private-lender compliance teams encounter when setting up, auditing, or transferring an escrow operation.What is the maximum escrow cushion under §1024.17?One-sixth of [...]
Every private mortgage loan settles into one of two structures: escrowed, with the servicer collecting and disbursing tax and insurance, or non-escrowed, with the borrower paying those obligations directly. The structure changes who bears which risk, what compliance load runs where, and how a [...]
The CFPB publishes Supervisory Highlights two to three times each year — public reports that document the most frequent compliance failures examiners observe in mortgage servicing, consumer lending, and other supervised activities. The reports do not name individual institutions; they describe the observed conduct [...]
The annual escrow analysis is the single most-audited operational artifact a servicer produces. Regulation X §1024.17 specifies the steps. The workflow below runs them in the sequence examiners and auditors expect to see.What is the computation year, and why does it matter?The computation year [...]
The seven escrow failure modes below recur in CFPB examiner findings and in private-lender complaints. Every one of them sits inside Regulation X §1024.17, and every one of them is preventable with operational discipline.Why does a late tax disbursement create the largest exposure?A property [...]
An impound account — the term most western states use; eastern states and federal regulators use "escrow account" — is the sub-account a mortgage servicer maintains for a borrower's property tax and homeowners insurance payments. The servicer collects a pro-rata share of those annual [...]
Lender referral programs are bounded by RESPA Section 8 (12 U.S.C. §2607). The ten questions below cover the territory most private-lender compliance teams face when designing or reviewing a referral structure.What does Section 8 actually prohibit?§2607(a) prohibits giving or accepting any fee, kickback, or [...]
The D.C. Circuit's 2016 decision in PHH Corp. v. Consumer Financial Protection Bureau, 839 F.3d 1, reshaped how lenders, brokers, and partners structure referral arrangements under RESPA Section 8. The case rejected the CFPB's view that captive reinsurance arrangements automatically violate Section 8, holding [...]
A private lender has two repeat-business channels: direct borrowers and broker partners. Both compound, but they compound at different rates and reward different operational disciplines. The lender who runs both knows which lever moves which channel.What is the structural difference between the two channels?Direct-borrower [...]
