Page:United States Statutes at Large Volume 104 Part 5.djvu/1089

 PUBLIC LAW 101-625—NOV. 28, 1990 104 STAT. 4411 tion, or the Federal Deposit Insurance Corporation, in any case in which the assignment, sale, or transfer of the servicing of the mortgage loan is preceded by— "(i) termination of the contract for servicing the loan for cause; "(ii) commencement of proceedings for bankruptcy of the servicer; or "(iii) commencement of proceedings by the Federal Deposit Insurance Corporation or the Resolution Trust Corporation for conservatorship or receivership of the servicer (or an entity by which the servicer is owned or controlled). "(3) SERVICING.—The term 'servicing' means receiving any scheduled periodic pa3nnents from a borrower pursuant to the terms of any loan, including amounts for escrow accounts described in section 10, and m^ng the payments of principal and interest and such other payments with respect to the amounts received from the borrower as may be required pursuant to the terms of the loan.". SEC. 942. MORTGAGE ESCROW ACCOUNTS. (a) IN GENERAL.— Section 10 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2609) is amended— (1) by inserting "(a) IN GENERAL.— " after the section designation; and (2) by adding at the end the following new subsections: "(b) NOTIFICATION OF SHORTAGE IN ESCROW ACCOUNT. — If the terms of any federally related mortgage loan require the borrower to make payments to the servicer (as the term is defined in section 6(i)) of the loan for deposit into an escrow account for the purpose of assuring payment of taxes, insurance premiums, and other charges with respect to the property, the servicer shall notify the borrower not less than annually of any shortage of funds in the escrow account. "(c) ESCROW ACCOUNT STATEMENTS. — " (1) INITIAL STATEMENT. — "(A) IN GENERAL.—Any servicer that has established an escrow account in connection with a federally related mortgage loan shall submit to the borrower for which the escrow account has been established a statement clearly itemizing the estimated taxes, insurance premiums, and other charges that are reasonably anticipated to be paid from the escrow account during the first 12 months after the establishment of the account and the anticipated dates of such payments. "(B) TIME OF SUBMISSION.— The statement required under subparagraph (A) shall be submitted to the borrower at closing with respect to the property for which the mortgage loan is made or not later than the expiration of the 45-day period beginning on the date of the establishment of the escrow account. "(C) INITIAL STATEMENT AT CLOSING. —Any servicer may submit the statement required under subparagraph (A) to the borrower at closing and may incorporate such statement in the uniform settlement statement required under section 4. Not later than the expiration of the 90-day period Regulations, beginning on the date of the enactment of the Cranston-

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