In the January 22, 2013, issue of the Federal Register (Vol. 78, Pages 4726 – 4757, click here) the Bureau of Consumer Financial Protection (CFPB) published a final rule amending the escrow account requirement for first lien higher-priced mortgage loans under §1026.35 of Regulation Z. This final rule is effective June 1, 2013, and applicable to higher-priced mortgage loans for which creditors receive applications on or after June 1, 2013. The final rule make three major changes to the escrow account requirement in existing §1026.35: 1. It extends the required escrow account period for first lien higher-priced mortgage loans to a minimum of five years after origination. It adds the following requirements that must be met after that period for the escrow account to be cancelled: (i) the unpaid principal balance of the loan (including any subordinate financing of which the creditor has reason to know) is less than 80% of the original value of the property, and (ii) the consumer currently is not delinquent or in default on the loan.