(a) Timely escrow
disbursements required. If the terms of a mortgage loan require
the borrower to make payments to the servicer of the mortgage
loan for deposit into an escrow account to pay taxes, insurance premiums,
and other charges for the mortgaged property, the servicer shall make
payments from the escrow account in a timely manner, that is, on or
before the deadline to avoid a penalty, as governed by the requirements
in section 1024.17(k).
(b) Refund
of escrow balance.
(1) In general. Except as provided
in paragraph (b)(2) of this section, within 20 days (excluding legal
public holidays, Saturdays, and Sundays) of a borrower’s payment of
a mortgage loan in full, a servicer shall return to the borrower any
amounts remaining in an escrow account that is within the servicer’s
control.
(2) Servicer may credit funds to a new escrow account. Notwithstanding
paragraph (b)(1) of this section, if the borrower agrees, a servicer
may credit any amounts remaining in an escrow account that is within
the servicer’s control to an escrow account for a new mortgage loan
as of the date of the settlement of the new mortgage loan if the new
mortgage loan is provided to the borrower by a lender that:
(i) Was also the lender to whom
the prior mortgage loan was initially payable;
(ii) Is the owner or assignee of the
prior mortgage loan; or
(iii)
Uses the same servicer that serviced the prior mortgage loan to service
the new mortgage loan.
