+1 vote
asked Jan 19, 2018 in Conventional Loans by anonymous

2 Answers

+1 vote
Hello, and thank your for your question.

The standard loan-to-value for being able to waive impound accounts is 80 percent, assuming that you don't have a government-backed loans. I am not a lawyer, but the Code of Federal Regulation seems to state that impounds can be dropped when the loan-to-value reaches 80 percent. Understand, though, that many lenders charge for the privilege.

Here's the link to the code and what it says:

https://www.law.cornell.edu/uscode/text/15/1639d

Duration of mandatory escrow or impound accountAn escrow or impound account established pursuant to subsection (b) shall remain in existence for a minimum period of 5 years, beginning with the date of the consummation of the loan, unless and until—
(1) such borrower has sufficient equity in the dwelling securing the consumer credit transaction so as to no longer be required to maintain private mortgage insurance;
(2) such borrower is delinquent;
(3) such borrower otherwise has not complied with the legal obligation, as established by rule; or
(4) the underlying mortgage establishing the account is terminated.

I suggest requesting in writing that your loan servicer terminate your escrow account once you have reached this threshold, or provide evidence that they are allowed to continue keeping it in force.
answered Jan 24, 2018 by GinaPogol (47,650 points)
0 votes
Escrows are mandatory on all government loans.  FHA, VA, USDA all require escrows no matter how low the Loan To Value is. Escrows are required on Conventional Loans with loan to values higher than 80%. Home buyers who put 20% down payment on Conventional Loans can waive escrows.

Gustan Cho NMLS 873293
Branch Manager
The Gustan Cho Team at USA MORTGAGE
www.gustancho.com
answered Feb 6, 2018 by GustanCho (106,540 points)

Welcome to The Mortgage Reports Q&A Forum. Have your questions answered by experienced mortgage and real estate professionals.
515 questions
662 answers
883 users