State Codes and Statutes
Statutes > Rhode-island > Title-19 > Chapter-19-9 > 19-9-2SECTION 19-9-2
§ 19-9-2 Escrow accounts – Interest.– (a) Every mortgagee holding funds of a mortgagor in escrow for the payment oftaxes and insurance premiums with respect to mortgaged property located in thisstate shall pay or credit interest on those funds at a rate equal to the ratepaid to the mortgagee on its regular savings account, if offered, and otherwiseat a rate not less than the prevailing market rate of interest for regularsavings accounts offered by local financial institutions as determined by thedirector, said determination to be made within thirty (30) days of theeffective date of this provision and thereafter annually on the first businessday of the year. Said credit of interest shall accrue on the daily balance andbe made annually on December 31. If the mortgage debt is paid prior to Decemberthirty-first in any year, the interest to the date of payment shall be paid tothe mortgagor. The provision of this section shall apply only with respect tomortgages on owner-occupied residential property consisting of not more thanfour (4) living units. The provisions of this section shall not be waived. Nomortgagee holding the mortgagor's funds in escrow for the payment of taxesshall also charge an annual "tax service fee" or other annual fee forascertaining whether or not the real estate taxes have in fact been paid. Anymortgagee violating the provisions of this section shall be fined not more thanone hundred dollars ($100) for each offense.
(b) Mortgages insured or guaranteed by the farmer's home loanadministration, federal housing administration, or the veterans'administration, or a private mortgage insurer licensed to do business in thestate of Rhode Island or made pursuant to the provisions of chapter 55 of title42 shall be exempt from the requirements of this section.
(c) The director or the director's designee shall adopt anyregulations that are necessary to carry out the provisions of this section.
