Revisiting 2015's New Flood Regulations, Part 2

Mortgage Compliance Magazine
9 minute read | February.02.2016

Escrow Provisions

The Final Flood Rule also imposes new requirements related to the escrow of flood insurance premiums and fees. Previously, flood insurance premiums and fees were required to be escrowed if (1) any taxes, insurance premiums, fees, or other charges were required to be escrowed; and (2) the loan was secured by residential improved real estate or a mobile home and made, increased, extended, or renewed on or after October 1, 1996. However, Biggert-Waters and HFIAA directed the Agencies to (1) expand the mandatory escrow requirements to include most closed-end residential loans made, increased, extended, or renewed on or after January 1, 2016, even if no other charges are escrowed; and (2) require non-exempt lenders to provide borrowers with an option to escrow flood insurance premiums and fees for loans that are outstanding as of January 1, 2016, unless an exception applies. The Agencies also implemented notice requirements consistent with these provisions.

Originally published in Mortgage Compliance Magazine; reprinted with permission.

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Authors

Melissa Klimkiewicz Senior Counsel, Financial & Fintech Advisory, Strategic Advisory & Government Enforcement (SAGE)

Washington, D.C.

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D:+1 202 349 8098
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Practice:

Financial & Fintech Advisory
Strategic Advisory & Government Enforcement (SAGE)
Fintech

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Melissa Klimkiewicz Senior Counsel

Washington, D.C.

She frequently assists Federal Housing Administration (FHA) mortgagees with their program approval efforts, annual recertifications, compliance with and understanding of program rules and self-reporting obligations, audits by the Quality Assurance Division (QAD), inquiries from the Office of Inspector General (OIG) and enforcement actions by the Mortgagee Review Board (MRB). Melissa performs similar work related to the Ginnie Mae, U.S. Department of Housing and Urban Development (HUD) Section 184, U.S. Department of Veterans Affairs (VA Department) and U.S. Department of Agriculture Rural Housing Service loan programs. Her work also includes assisting clients with False Claims Act (FCA)-based risk assessments arising from participation in government lending programs. She represents both mortgage and reverse mortgage/Home Equity Conversion Mortgage (HECM) lenders and servicers.

In addition, Melissa’s practice focuses on the mandatory purchase of flood insurance requirements under the Flood Disaster Protection Act, which includes regularly advising lenders and servicers on the ins and outs of the federal banking agencies’, FHA’s and the government sponsored enterprises’ (GSE) flood insurance-related regulations and guidance. She also assists clients with satisfying Consumer Financial Protection Bureau (CFPB) and other regulators’ expectations for providing assistance to consumers impacted by presidentially declared disasters.

Melissa frequently counsels clients in matters arising under the Real Estate Settlement Procedures Act (RESPA), Truth in Lending Act (TILA), Consumer Financial Protection Act (CFPA), Mortgage Acts and Practices Rule (MAP), the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE) and related state licensing laws, state regulation of real estate brokers and property managers, and a range of other federal and state consumer financial laws impacting lending and servicing.

Melissa has been recognized by The Legal 500 in the Financial Services: Litigation practice area. She is a former Co-Chair (2014-2017) and Co-Vice Chair (2011-2014) of the Housing Finance Subcommittee of the American Bar Association’s Consumer Financial Services Committee. She also is an active member of the Mortgage Bankers Association and National Reverse Mortgage Lenders Association.

Prior to joining Orrick, Melissa was senior counsel and a former partner at Buckley LLP. Previously, she was an associate at Howrey LLP and was a law clerk at Buckley Kolar LLP while attending law school.