Fed Rule on Mortgage Escrow Accounts

On February 23, the Fed issued a final rule under Reg Z (TILA) which, pursuant to the Dodd-Frank Act, increases the APR threshold used to determine whether a mortgage lender is required to establish an escrow account for taxes and insurance for first-lien “jumbo” mortgage loans. The Fed also proposed a rule under Reg Z (TILA) that would expand the minimum mandatory escrow period for first-lien mortgage loans from one to five years and would implement new disclosure requirements contained in the Dodd-Frank Act. Comments on the proposed rule must be submitted within 60 days after publication in the Federal Register. Fed Release. Fed Final Rule. Fed Proposed Rule.

Fed Will Not Finalize Reg Z Rulemakings

On February 1, the Fed announced that it does not expect to finalize three pending mortgage lending rulemakings under Regulation Z, which implements the Truth in Lending Act (TILA), prior to the transfer of authority for such rulemakings to the Consumer Financial Protection Bureau in July 2011. Fed Release.

Fed Interim Rule Amending Reg Z

On December 22, the Fed approved an interim rule amending Regulation Z, which implements the Truth in Lending Act (TILA). The interim rule clarifies certain aspects of a September 24, 2010 interim rule in response to public comments. The September interim rule implements provisions of the Mortgage Disclosure Improvement Act which amended TILA to require mortgage lenders to disclose examples of how a loan’s interest rate or monthly payments can change. Those statutory amendments will become effective on January 30. Fed Release.