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Fully understanding the changes required may involve a review of your existing business
processes and recordkeeping regimes, as well as the hardware and software that you, your
agents, or other business partners use.
The TILA HPML Escrow Rule’s requirements may affect a number of parts of your business
systems and processes. For example, the servicing department will need to calculate termination
dates for escrow accounts for higher-priced mortgage loans covered by the rule. Your
organization may also seek to evaluate ways to transition out of escrowing for such loans for
applications received on or after May 1, 2016, so that, effective May 1, 2016, your organization
can meet that part of the test for the small-creditor exemption (if you otherwise qualify for the
exemption, and other than for distressed consumers, under the TILA HPML Escrow Rule)(Note:
The TILA HPML Escrow Rule previously required that you stop escrowing for such loans for
applications received on or after January 1, 2014, but the March 2016 Interim Final Rule
changed the requirement to loans for which applications are received on or after May 1, 2016).
The forms and processes you use to communicate internally and externally may be affected by
the need to verify whether your applicants live in communities that purchase master insurance
policies. You will also want to adjust your systems and processes so they no longer escrow for
insurance premiums for loans secured by dwellings in common interest communities where
dwellings owners must participate in a governing association that is required to maintain a
master property insurance policy insuring all dwellings, to the extent that those premiums were
being escrowed to comply with the Federal Reserve Board’s 2008 final rule implementing
changes to Regulation Z pursuant to authority granted under the Home Ownership and Equity
Protection Act.
7.1.3 Identifying critical impacts on key service providers or
business partners
Software providers, or other vendors and business partners, may offer compliance solutions that
can assist with making the changes. These key partners will depend on your business model. For
example, banks and credit unions may find it helpful to talk to their correspondent banks,
secondary market partners, and technology vendors. In some cases, you may find it useful to
negotiate revised or new contracts with these parties, or seek a different set of services.