109 HR 3455 IH: Homeowners’ Escrow Payments Assurance Act U.S. House of Representatives 2005-07-27 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

I 109th CONGRESS 1st Session H. R. 3455 IN THE HOUSE OF REPRESENTATIVES July 27, 2005 Mr. Andrews 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 provide for homeowners to recover treble damages from mortgage escrow servicers for failures by such servicers to make timely payments from escrow accounts for homeowners insurance, taxes, or other charges, and for other purposes.

1.

Short title

This Act may be cited as the Homeowners’ Escrow Payments Assurance Act.

2.

Treble damages for failure to make payments from escrow account

Section 6(f) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605(f)) is amended— (1)in paragraph (1), by striking subparagraph (A) and inserting the following new subparagraph: (A) (i)except as provided in clause (ii), any actual damages to the borrower as a result of the failure; or (ii)in the case of an action for a failure to comply with the requirements of subsection (g), 3 times any such actual damages; and; and (2)in paragraph (2), by striking subparagraph (A) and inserting the following new subparagraph: (A) (i)except as provided in clause (ii), any actual damages to each of the borrowers in the class as a result of the failure; or (ii)in the case of an action for a failure to comply with the requirements of subsection (g), 3 times any such actual damages; and.

3.

Fine for failure to make payments from escrow account resulting in lapse in insurance coverage

Section 6 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605) is amended— (1)by redesignating subsections (h) through (j) as subsections (i) through (k), respectively; and (2)by inserting after subsection (g) the following new subsection: (h)

Fine for failure to make payments from escrow account resulting in lapse in insurance coverage

(1)

In general

If the servicer of a federally related mortgage loan collects payments from the borrower for deposit into an escrow account for the purpose of assuring payment of insurance premiums and a failure by the servicer to make timely payments from the escrow account for such insurance premiums results in a lapse in such insurance coverage for any period of time, the Secretary shall assess against the servicer a civil penalty of $1,000 for each full or partial day of such lapse. (2)

Use of amounts

The amounts collected by the Secretary from fines under this section shall be available to the Secretary, to the extent provided in appropriation Acts, as follows: (A)

Downpayment assistance

90 percent of any such amounts shall be available only for the Secretary to carry out a program to provide assistance to low-income families (as such term is defined in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b)) for use as downpayments for the acquisition of principal residences. (B)

Consumer advocacy assistance

10 percent of any such amounts shall be available only for the Secretary to provide assistance for nonprofit organizations that engage in legal advocacy activities relating to protection of consumer rights, which shall be selected by the Secretary in consultation with the Attorney General..