III.A.1.m. Disclosures (03/14/16)

Owned by Kacey Olson (Unlicensed)
Last updated: Nov 25, 2018
2 min read

© HUD Single Family Housing Policy Handbook 4000.1

Included in this section are:

i. Statement of Escrow Account

ii. Payoff Disclosure

iii. Annual Prepayment Disclosure Statements

iv. Statement for Income Tax Purposes

i. Statement of Escrow Account

At the Borrower’s request, the Mortgagee must promptly furnish a statement of the escrow account in a clear and understandable form, with sufficient information to permit the Borrower to reconcile the account.

ii. Payoff Disclosure

(A) Definition A Payoff Disclosure is a disclosure accompanying the payoff statement and, for Mortgages closed before January 21, 2015, describing the procedures for prepayment of a Mortgage.

(B) Standard When notified of the Borrower’s intent to prepay a Mortgage, the Mortgagee must send to the Borrower directly the Payoff Disclosure and copy of the payoff statement.

(C) Required Documentation The Mortgagee must retain a copy of the Payoff Disclosure in the servicing file.

iii. Annual Prepayment Disclosure Statements

(A) Definition An Annual Prepayment Disclosure Statement is a statement of the amount outstanding on the Mortgage and, for Mortgages closed before January 21, 2015, the requirements that the Borrower must fulfill upon prepayment to prevent accrual of interest after the date of prepayment.

(B) Standard The Mortgagee must provide the Borrower with a written Annual Prepayment Disclosure Statement on an annual basis.

(C) Required Documentation The Mortgagee must retain a copy of the Annual Prepayment Disclosure Statement in the servicing file.

iv. Statement for Income Tax Purposes

(A) Definition The Statement for Income Tax Purposes is an Internal Revenue Service (IRS) Form 1098, Mortgage Interest Statement, or equivalent that provides documentation of taxes and interest paid by the Borrower during the preceding calendar year.

(B) Standard The Mortgagee must provide the Borrower with a Statement for Income Tax Purposes by January 30 of each year.

(C) Required Documentation The Mortgagee must retain a copy of each annual Statement for Income Tax Purposes in the servicing file.