§ 19-9-2. Escrow accounts — Interest.
(a) Every mortgagee holding funds of a mortgagor in escrow for the payment of taxes and
insurance premiums with respect to mortgaged property located in this state shall
pay or credit interest on those funds at a rate equal to the rate paid to the mortgagee
on its regular savings account, if offered, and otherwise at a rate not less than
the prevailing market rate of interest for regular savings accounts offered by local
financial institutions as determined by the director, said determination to be made
within thirty (30) days of the effective date of this provision and thereafter annually
on
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§ 19-9-2. Escrow accounts — Interest.
(a) Every mortgagee holding funds of a mortgagor in escrow for the payment of taxes and
insurance premiums with respect to mortgaged property located in this state shall
pay or credit interest on those funds at a rate equal to the rate paid to the mortgagee
on its regular savings account, if offered, and otherwise at a rate not less than
the prevailing market rate of interest for regular savings accounts offered by local
financial institutions as determined by the director, said determination to be made
within thirty (30) days of the effective date of this provision and thereafter annually
on the first business day of the year. Said credit of interest shall accrue on the
daily balance and be made annually on December 31. If the mortgage debt is paid prior
to December 31 in any year, the interest to the date of payment shall be paid to the
mortgagor. The provision of this section shall apply only with respect to mortgages
on owner-occupied residential property consisting of not more than four (4) living
units. The provisions of this section shall not be waived. No mortgagee holding the
mortgagor's funds in escrow for the payment of taxes shall also charge an annual "tax
service fee� or other annual fee for ascertaining whether or not the real estate taxes
have in fact been paid. Any mortgagee violating the provisions of this section shall
be fined not more than one hundred dollars ($100) for each offense.
(b) Mortgages insured or guaranteed by the Farmer's Home Loan Administration, Federal
Housing Administration, or the Veterans' Administration, or a private mortgage insurer
licensed to do business in the state of Rhode Island or made pursuant to the provisions
of chapter 55 of title 42 shall be exempt from the requirements of this section.
(c) The director, or the director's designee, shall adopt any regulations that are necessary
to carry out the provisions of this section.