Magazine article Mortgage Banking

FDIC Simplifies Coverage Rules for Mortgage Servicing Accounts

Magazine article Mortgage Banking

FDIC Simplifies Coverage Rules for Mortgage Servicing Accounts

Article excerpt

The Federal Deposit Insurance Corporation has rolled out an interim final rule clarifying that deposit accounts maintained by mortgage servicers in escrow for a borrower's principal and interest payments will be based on the borrower as the owner of the escrow account and not the investor.

Under the interim rule--approved by the FDIC's board of directors Oct. 10 and effective immediately--coverage will be provided to the lenders/investors as a collective group, based on the cumulative amount of the borrowers' payments of principal and interest into the account.

Because servicers are able to identify borrowers more quickly than investors, the per-borrower coverage provided for under the interim rule would enable the FDIC to make deposit insurance determinations on mortgage servicing accounts more quickly and to pay deposit insurance more quickly.

This insurance coverage afforded in connection with principal and interest payments in mortgage servicing accounts would not be aggregated with or otherwise affect the coverage provided to borrowers in connection with other accounts the borrowers might maintain at the same insured depository institution, according to FDIC Chairman Sheila C. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.