Idaho Code 26-31-212 – Reserve Accounts
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(1) A mortgage lender shall, conspicuously and specifically, disclose to each borrower all contractual provisions relating to reserve accounts, impound accounts, escrow accounts, or any other account maintained for the borrower in order to pay for property taxes, property insurance, or private mortgage insurance.
(2) Except as otherwise required by the truth in lending act, the real estate settlement procedures act, regulation X, or regulation Z, a mortgage lender shall not keep more than one hundred twenty percent (120%) of the amounts necessary on an annual basis to pay expected insurance, taxes, or other agreed charges. Upon written notice by a borrower to the mortgage lender that reserves being required are excessive, the mortgage lender must, within thirty (30) days, either refund the excess or explain to the borrower why the amounts being required are believed to be reasonable and necessary. If, after notice of hearing under chapter 52, title 67, Idaho Code, the director determines that the reserve account, impound account, escrow account, or any other similar account maintained for a borrower is not reasonable, the director may order the mortgage lender to reduce its reserve requirements for such accounts. In any proceeding under this section, the burden shall be upon the mortgage lender to prove that the amounts required for such reserve accounts are based upon actual and reasonably anticipated charges.
Terms Used In Idaho Code 26-31-212
- Borrower: means the person who has applied for a residential mortgage loan from a licensee, or person required to be licensed, under this chapter, or on whose behalf the activities set forth in section 26-31-201(3), (5) or (7) or 26-31-303(7), Idaho Code, are conducted. See Idaho Code 26-31-102
- Director: means the director of the department of finance. See Idaho Code 26-31-102
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgage lender: means any nonexempt organization that makes residential mortgage loans to borrowers and performs the activities described in subsection (7) of this section. See Idaho Code 26-31-201
- Property: includes both real and personal property. See Idaho Code 73-114
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.