[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2208 Introduced in House (IH)]







107th CONGRESS
  1st Session
                                H. R. 2208

 To amend the Real Estate Settlement Procedures Act of 1974 to require 
the payment of interest on escrow and impoundment accounts established 
  for the payment of taxes and fire and hazard insurance premiums on 
          property securing a federally related mortgage loan.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 14, 2001

  Mr. Watt of North Carolina (for himself, Ms. Waters, and Mr. Frank) 
 introduced the following bill; which was referred to the Committee on 
                           Financial Services

_______________________________________________________________________

                                 A BILL


 
 To amend the Real Estate Settlement Procedures Act of 1974 to require 
the payment of interest on escrow and impoundment accounts established 
  for the payment of taxes and fire and hazard insurance premiums on 
          property securing a federally related mortgage loan.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. INTEREST ON ESCROW ACCOUNTS.

    (a) In General.--Subsection (g) of section 6 of the Real Estate 
Settlement Procedures Act of 1974 (12 U.S.C. 2605(g)) is amended--
            (1) by striking ``Escrow Accounts.--If the terms'' and 
        inserting ``Escrow Accounts.--
            ``(1) In general.--If the terms''; and
            (2) by inserting after paragraph (1) (as so designated by 
        paragraph (1) of this subsection) the following new paragraphs:
            ``(2) Other provisions applicable to certain escrow 
        accounts.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, if the terms of any federally related 
                mortgage loan require the borrower to make payments to 
                the servicer of the loan for deposit into an escrow or 
                impoundment account for the purpose of assuring payment 
                of taxes and fire and hazard insurance premiums with 
                respect to the property, the lender, servicer, or other 
                person maintaining such escrow or impoundment account 
                shall pay interest to the borrower on any balance in 
                the account at an annual percentage rate of not less 
                than 3.5 percent.
                    ``(B) No preemption of state law with interest 
                payment requirement.--Notwithstanding subsection (h), 
                subparagraph (A) shall not apply in any State the laws 
                of which require the payment of interest on escrow or 
                impoundment accounts described in such paragraph.
                    ``(C) Rule of construction.--No provision of this 
                paragraph shall be construed as applying to any escrow 
                account that is established in connection with a real 
                estate transaction and is not subject to the terms of a 
                federally related mortgage loan.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply with respect to escrow or impoundment accounts described in such 
paragraph that are established pursuant to the terms of a federally 
related mortgage loan after the end of the 6-month period beginning on 
the date of the enactment of this Act.
                                 <all>