Comment for 1024.17 Escrow Accounts
17(k) Timely payments.
17(k)(5) Timely payment of hazard insurance.
17(k)(5)(ii) Inability to disburse funds.
17(k)(5)(ii)(A)When inability exists.
1. Examples of reasonable basis to believe that a policy has been cancelled or not renewed. The following are examples of where a servicer has a reasonable basis to believe that a borrower's hazard insurance policy has been canceled or not renewed for reasons other than the nonpayment of premium charges:
i. A borrower notifies a servicer that the borrower has cancelled the hazard insurance coverage, and the servicer has not received notification of other hazard insurance coverage.
ii. A servicer receives a notification of cancellation or non-renewal from the borrower's insurance company before payment is due on the borrower's hazard insurance.
iii. A servicer does not receive a payment notice by the expiration date of the borrower's hazard insurance policy.
17(k)(5)(ii)(C) Recoupment for advances.
1. Month-to-month advances. A servicer that advances the premium payment to be disbursed from an escrow account may advance the payment on a month-to-month basis, if permitted by State or other applicable law and accepted by the borrower's hazard insurance company.