HB 363: "An Act requiring banks to pay interest on money in reserve accounts held in connection with mortgage loans."
00HOUSE BILL NO. 363 01 "An Act requiring banks to pay interest on money in reserve accounts held in 02 connection with mortgage loans." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 06.05 is amended by adding a new section to read: 05 Sec. 06.05.285. INTEREST ON RESERVE ACCOUNTS. (a) A bank that 06 requires the payment of money by a borrower into an escrow reserve account for the 07 payment of taxes, insurance premiums, or home owner's association dues in connection 08 with a mortgage loan shall pay interest on the money in that account unless the 09 account is required by federal law or regulation. The rate of interest paid on money 10 in a reserve account shall equal two percent less than the rate of interest charged to 11 the borrower for the mortgage loan and shall be computed on the average monthly 12 balance in that account each month. 13 (b) Interest earned on money in a reserve account shall be annually credited 14 to the remaining principal balance on the mortgage loan or, at the election of the
01 borrower, shall be paid to the borrower. 02 * Sec. 2. AS 06.05.285, enacted in sec. 1 of the Act, applies to escrow reserve accounts 03 established before the effective date of this Act, as well as to accounts established on or after 04 the effective date of this Act, with interest to be paid beginning on the effective date of this 05 Act on money in those accounts.