Question

When a lender cancels an escrow account for a reason other than default or termination caused by refinancing, repayment or rescission, they have how many days prior to closing the account to deliver an Escrow Closing Notice?

A) 10 days
B) 15 days
C) 30 days
D) 45 days

Answer 1

Lenders are required to deliver an Escrow Closing Notice at least 30 days before closing an escrow account when it is not due to default, refinancing, repayment, or rescission.

Step-by-step explanation:

When a lender decides to cancel an escrow account for reasons other than default or termination caused by refinancing, repayment, or rescission, the lender is required by regulation to provide an Escrow Closing Notice to the borrower. According to the Real Estate Settlement Procedures Act (RESPA), the lender must deliver this notice at least 30 days prior to closing the account. This timeline ensures that borrowers are adequately informed and can make necessary arrangements following the closure of the escrow account.