On March 2, 2011, the Federal Reserve issued a final rule that increases the annual percentage rate threshold for determining whether a lender must establish an escrow account for first-lien, jumbo mortgage loans. This final rule implements a specific provision of the Dodd-Frank Act. Under the rule, escrow accounts will generally be required on jumbo mortgage loans where their APR is 2.5 percentage points or more above the average prime offer rate. The APR threshold for non-jumbo loans remains unchanged.
The final rule is effective for covered loans on which the creditor receives an application on or after April 1.
