First Regular Session
Sixty-second General Assembly
LLS NO. 99-0468.01 Bart Miller HOUSE BILL 99-1066
STATE OF COLORADO
BY REPRESENTATIVE Vigil;
also SENATOR Nichol.
BUSINESS AFFAIRS & LABOR
A BILL FOR AN ACT
101 CONCERNING A REQUIREMENT THAT SERVICERS OF RESIDENTIAL REAL
102 ESTATE MORTGAGES PAY INTEREST AT LEAST ANNUALLY ON
103 AMOUNTS MAINTAINED IN ESCROW ACCOUNTS.
Bill Summary
(Note: This summary applies to this bill as introduced and does
not necessarily reflect any amendments that may be subsequently
adopted.)
Requires servicers of residential real estate loans who maintain
escrow accounts for taxes, assessments, insurance, or other purposes
relating to the property to pay interest at the federal funds rate on the
amounts held in escrow. Requires that such interest be credited at least
annually to the debtor's account or upon termination of the account,
whichever is earlier. Specifies that no fee or charge may be imposed for
the maintenance of any such escrow account that results in a reduction in
the rate of interest required to be paid under this bill.
1 Be it enacted by the General Assembly of the State of Colorado:
2 SECTION 1. 38-40-103, Colorado Revised Statutes, is amended
3 BY THE ADDITION OF A NEW SUBSECTION to read:
4 38-40-103. Servicing of mortgages and deeds of trust - liability
5 for interest or late fees for property taxes - payment of interest on
6 escrow accounts. (5) ON AND AFTER THE EFFECTIVE DATE OF THIS
7 SUBSECTION (5), EVERY PERSON DOING BUSINESS IN THIS STATE WHO ACTS
[ ] denotes HOUSE amendment. { } denotes SENATE amendment.
Capital letters indicate new material to be added to existing statute.
Dashes through the words indicate material to be deleted from existing statute.
Page 2
1 AS THE SERVICER OF A LOAN UPON THE SECURITY OF REAL PROPERTY
2 CONTAINING ONLY A ONE- TO FOUR-FAMILY RESIDENCE AND WHO
3 RECEIVES MONEY IN ADVANCE FOR PAYMENT OF TAXES AND ASSESSMENTS
4 ON THE PROPERTY, FOR INSURANCE, OR FOR OTHER PURPOSES RELATING TO
5 THE PROPERTY SHALL PAY INTEREST TO THE DEBTOR ON ALL AMOUNTS SO
6 HELD. THE INTEREST ON SUCH AMOUNTS SHALL BE AT THE APPLICABLE
7 FEDERAL FUNDS RATE, WHICH IS THE AVERAGE OF THE FEDERAL FUNDS
8 RATES PUBLISHED BY THE FEDERAL RESERVE BANK OF NEW YORK FOR
9 EACH OF THE DAYS FOR WHICH INTEREST IS PAYABLE, DIVIDED BY THREE
10 HUNDRED SIXTY. THE FEDERAL FUNDS RATE FOR ANY DAY ON WHICH A
11 PUBLISHED RATE IS NOT AVAILABLE IS THE SAME AS THE PUBLISHED RATE
12 FOR THE NEXT PRECEDING DAY FOR WHICH THERE IS A PUBLISHED RATE.
13 SUCH INTEREST SHALL BE CREDITED TO THE DEBTOR'S ACCOUNT AT LEAST
14 ANNUALLY OR UPON TERMINATION OF SUCH ACCOUNT, WHICHEVER IS
15 EARLIER. NO FEE OR CHARGE SHALL BE IMPOSED IN CONNECTION WITH THE
16 MAINTENANCE OR DISBURSEMENT OF MONEY RECEIVED IN ADVANCE FOR
17 THE PAYMENT OF TAXES, ASSESSMENTS, INSURANCE, OR OTHER PURPOSES
18 RELATING TO THE PROPERTY IF ANY SUCH FEE OR CHARGE WILL RESULT IN
19 AN INTEREST RATE PAID TO THE DEBTOR OF LESS THAN THE INTEREST RATE
20 REQUIRED BY THIS SUBSECTION (5).
21 SECTION 2. Effective date. This act shall take effect at 12:01
22 a.m. on the day following the expiration of the ninety-day period after
23 final adjournment of the general assembly that is allowed for submitting
24 a referendum petition pursuant to article V, section 1 (3) of the state
25 constitution; except that, if a referendum petition is filed against this act
26 or an item, section, or part of this act within such period, then the act,
Page 3
1 item, section, or part, if approved by the people, shall take effect on the
2 date of the official declaration of the vote thereon by proclamation of the
3 governor.