How often must an Annual Escrow Statement be provided to a borrower?

How often must an Annual Escrow Statement be provided to a borrower?

• A. Every month
• B. Every quarter
• C. Once a year
• D. Whenever requested by the borrower

Answer: (C)

An Annual Escrow Statement must be provided to a borrower once a year. This requirement is in accordance with federal regulations, specifically the Real Estate Settlement Procedures Act (RESPA), which mandates that lenders provide borrowers with an annual statement to outline the deposit and disbursement of funds in their escrow account. This statement helps borrowers understand how their funds are being managed, including the amounts collected for property taxes, insurance, and other related expenses. Receiving this statement annually ensures that borrowers stay informed about the status of their escrow account and can anticipate any changes in their escrow requirements. Providing it more frequently, such as monthly or quarterly, would not align with regulations and would create unnecessary administrative burdens for both lenders and borrowers. While borrowers can request additional information or statements at any time, the standard requirement is to provide a comprehensive Annual Escrow Statement once per year.

An Annual Escrow Statement must be provided to a borrower once a year. This requirement is in accordance with federal regulations, specifically the Real Estate Settlement Procedures Act (RESPA), which mandates that lenders provide borrowers with an annual statement to outline the deposit and disbursement of funds in their escrow account. This statement helps borrowers understand how their funds are being managed, including the amounts collected for property taxes, insurance, and other related expenses.

Receiving this statement annually ensures that borrowers stay informed about the status of their escrow account and can anticipate any changes in their escrow requirements. Providing it more frequently, such as monthly or quarterly, would not align with regulations and would create unnecessary administrative burdens for both lenders and borrowers. While borrowers can request additional information or statements at any time, the standard requirement is to provide a comprehensive Annual Escrow Statement once per year.