Colorado Legislative Council Staff
NO FISCAL IMPACT
January 6, 1999
House Business Affairs
Will Meyer (303-866-4976)
TITLE: CONCERNING A REQUIREMENT THAT SERVICERS OF RESIDENTIAL REAL ESTATE MORTGAGES PAY INTEREST AT LEAST ANNUALLY ON AMOUNTS MAINTAINED IN ESCROW ACCOUNTS.
Summary of Assessment
This bill requires servicers of residential real estate loans made on properties containing only a one-to four-family residence and who maintain escrow accounts for taxes, assessments, insurance, or other purposes relating to the property, to pay interest on the accounts to the owners of the property. The bill requires the servicers to pay interest at the applicable federal funds rate. The current federal funds rate is approximately 4.75 percent. The bill prohibits servicers from imposing a fee or charge in connection with the maintenance or disbursement of money received in advance for payments to the escrow account, if the fee or charge results in an interest paid on the account or less than the applicable federal rate. The bill would become effective 90 days after the Legislature adjourns, unless a referendum petition is filed and approved by the voters.
The bill will affect mortgage lenders and borrowers. The provisions of the bill will not have any fiscal impact on any state agency, or unit of local government. Therefore, this bill is assessed as having no fiscal impact.