Which section of RESPA deals specifically with escrow accounts?

The correct choice is indeed the section that addresses escrow accounts, which is Section 10 of the Real Estate Settlement Procedures Act (RESPA). This section specifically sets forth guidelines regarding the management of escrow accounts used for the payment of property taxes and insurance premiums.

Section 10 outlines the limits on the amount that a lender can require a borrower to deposit into an escrow account, ensuring that borrowers are not overburdened with excessive prepayments. It mandates that lenders must provide an annual statement detailing the activity in the escrow account, including any deposits and disbursements, helping borrowers stay informed about their account status.

Additionally, Section 10 details the rules regarding the allowed cushion that may be held in the escrow account, which cannot exceed 1/6th of the total annual disbursements. This regulation is designed to protect consumers and maintain transparency throughout the escrow process. Understanding this section is crucial for mortgage loan officers as it affects how they manage escrow accounts for their clients, ensuring compliance with federal regulations.