Must lenders separately itemize the estimated amount for taxes and insurance if an escrow account is established?

Lenders are required to separately itemize the estimated amounts for taxes and insurance when an escrow account is established. This requirement is rooted in the Truth in Lending Act (TILA) and its implementing regulation, Regulation Z. The itemization provides borrowers with clear and detailed information about the components of their monthly payments and helps them understand the total costs associated with their loan, including what is being set aside for property taxes and homeowners insurance. This transparency is crucial for borrowers to effectively manage their finances and avoid any surprises related to those costs over the life of the loan. By ensuring that these amounts are clearly itemized, lenders comply with the regulatory requirements intended to promote informed borrowing and understanding among consumers.