H-2951.3 _______________________________________________
HOUSE BILL 2332
_______________________________________________
State of Washington 53rd Legislature 1994 Regular Session
By Representatives Eide, Zellinsky, Kessler and Karahalios
Read first time 01/14/94. Referred to Committee on Financial Institutions & Insurance.
AN ACT Relating to mortgage escrow accounts; and adding a new section to Title 61 RCW.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1. A new section is added to Title 61 RCW to read as follows:
(1) Each mortgage escrow account shall be analyzed at least once per year. If there is an overage of funds necessary to meet all obligations, then the lender shall refund the overage to the loan customer within thirty days of completion of the escrow analysis.
(2) Beginning January 1, 1995, each lender shall place all funds received from the residential real estate loan customer and designated for the payment of property taxes and hazard insurance on the residential real estate loan into an interest-bearing mortgage escrow account. The interest accruing on this account, minus reasonable and appropriate service charges or fees, shall be paid to the residential real estate mortgage customer. Interest shall be computed on the average monthly balance in the account and shall be paid by crediting the escrow account the amount due at least annually. The rate of interest accruing shall not be less than the typical rate paid on passbook savings accounts in the state.
(3) For purposes of this section:
(a) "Residential real estate loan" means a loan secured by a mortgage or deed of trust on the borrower's interest in a one-to-four family dwelling, including a manufactured home, an individual cooperative unit, or a loan for the construction of the dwelling.
(b) "Lender" means any individual, corporation, association, partnership, or trust doing business under the laws of this state or the United States relating to banks, bank holding companies, mutual savings banks, trust companies, savings and loan associations, credit unions, consumer finance companies, investment companies, insurance companies, mortgage companies, pension funds, or real estate investment trusts, and affiliates, subsidiaries, and service corporations thereof.
(c) "Mortgage escrow account" means an account created in conjunction with a residential real estate loan that is intended for the placement of funds, on an incremental basis, for the purpose of paying property taxes, hazard insurance, and other obligations of the residential real estate loan customer in relation to the residential real estate loan.
(4) The director of financial institutions may adopt rules necessary to carry out this section.
--- END ---