SAFE MLO RESPA & Regulation X question: servicer's annual escrow analysis shows

SAFE MLORESPA & Regulation X

A servicer's annual escrow analysis shows a $75 surplus, and the borrower is current on the loan. What must the servicer do?

A Refund the $75 to the borrower within 30 days of the analysis
B Credit the $75 against next year's escrow payments instead of refunding it
C Keep the $75 as extra cushion for next year
D Refund it only if the borrower asks in writing

Show the answer and explanation

Answer: A. Refund the $75 to the borrower within 30 days of the analysis

If an escrow analysis shows a surplus of $50 or more and the borrower is current, the servicer must refund the surplus within 30 days of the analysis (12 CFR 1024.17(f)(2)(i)). Only a surplus under $50 may be credited against next year's payments instead of refunded, so crediting $75 is not an option here. Source: 12 CFR 1024.17(f)(2) (as at 11 Oct 2026).

Common mistake

Treating a surplus over $50 as optional to refund.

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Related SAFE MLO practice questions

A borrower takes a 12-month loan to finance construction of a house; a separate permanent loan from another lender will pay it off. Under Regulation X, how is the construction loan treated?A borrower's annual property taxes are $4,800 and the homeowners insurance premium is $1,200. Under Regulation X, what is the largest cushion the servicer may hold in the escrow account?A borrower takes a $300,000 loan and pays $4,500 in prepaid finance charges (origination fee and discount points) at closing. What is the amount financed on the Truth in Lending disclosures?

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Original study material mapped to the public NMLS Content Outline; not a real test question.Not affiliated with or endorsed by NMLS, CSBS or SRR. Verify figures and rules against current guidance before relying on them.