124 STAT. 2179 PUBLIC LAW 111–203—JULY 21, 2010 in effect for a residence of the applicable size, as of the date such interest rate set, pursuant to the sixth sentence of section 305(a)(2) the Federal Home Loan Mortgage Cor- poration Act (12 U.S.C. 1454(a)(2)), and the annual percent- age rate will exceed the average prime offer rate as defined in section 129C by 1.5 or more percentage points; or ‘‘(B) exceeds the amount of the maximum limitation on the original principal obligation of mortgage in effect for a residence of the applicable size, as of the date such interest rate set, pursuant to the sixth sentence of section 305(a)(2) the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)), and the annual percentage rate will exceed the average prime offer rate as defined in section 129C by 2.5 or more percentage points; or ‘‘(4) so required pursuant to regulation. ‘‘(c) EXEMPTIONS.—The Board may, by regulation, exempt from the requirements of subsection (a) a creditor that— ‘‘(1) operates predominantly in rural or underserved areas; ‘‘(2) together with all affiliates, has total annual mortgage loan originations that do not exceed a limit set by the Board; ‘‘(3) retains its mortgage loan originations in portfolio; and ‘‘(4) meets any asset size threshold and any other criteria the Board may establish, consistent with the purposes of this subtitle. ‘‘(d) DURATION OF MANDATORY ESCROW OR IMPOUND ACCOUNT.—An escrow or impound account established pursuant to subsection (b) shall remain in existence for a minimum period of 5 years, beginning with the date of the consummation of the loan, unless and until— ‘‘(1) such borrower has sufficient equity in the dwelling securing the consumer credit transaction so as to no longer be required to maintain private mortgage insurance; ‘‘(2) such borrower is delinquent; ‘‘(3) such borrower otherwise has not complied with the legal obligation, as established by rule; or ‘‘(4) the underlying mortgage establishing the account is terminated. ‘‘(e) LIMITED EXEMPTIONS FOR LOANS SECURED BY SHARES IN A COOPERATIVE OR IN WHICH AN ASSOCIATION MUST MAINTAIN A MASTER INSURANCE POLICY.—Escrow accounts need not be estab- lished for loans secured by shares in a cooperative. Insurance pre- miums need not be included in escrow accounts for loans secured by dwellings or units, where the borrower must join an association as a condition of ownership, and that association has an obligation to the dwelling or unit owners to maintain a master policy insuring the dwellings or units. ‘‘(f) CLARIFICATION ON ESCROW ACCOUNTS FOR LOANS NOT MEETING STATUTORY TEST.—For mortgages not covered by the requirements of subsection (b), no provision of this section shall be construed as precluding the establishment of an impound, trust, or other type of account for the payment of property taxes, insurance premiums, or other purposes relating to the property— ‘‘(1) on terms mutually agreeable to the parties to the loan; ‘‘(2) at the discretion of the lender or servicer, as provided by the contract between the lender or servicer and the borrower; or
