I 

109TH CONGRESS 

1ST SESSION H. R. 3455

To amend the Real Estate Settlement Procedures Act of 1974 to provide 

for homeowners to recover treble damages from mortgage escrow servicers 

for failures by such servicers to make timely payments from escrow 

accounts for homeowners insurance, taxes, or other charges, and for 

other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 27, 2005

Mr. ANDREWS introduced the following bill; which was referred to the 

Committee on Financial Services 

A BILL

To amend the Real Estate Settlement Procedures Act of 

1974 to provide for homeowners to recover treble damages from mortgage escrow servicers for failures by such 

servicers to make timely payments from escrow accounts 

for homeowners insurance, taxes, or other charges, and 

for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Homeowners’ Escrow 

5 Payments Assurance Act’’. 
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1 SEC. 2. TREBLE DAMAGES FOR FAILURE TO MAKE PAY2 MENTS FROM ESCROW ACCOUNT. 

3 Section 6(f) of the Real Estate Settlement Proce4 dures Act of 1974 (12 U.S.C. 2605(f)) is amended—

5 (1) in paragraph (1), by striking subparagraph 

6 (A) and inserting the following new subparagraph: 

7 ‘‘(A)(i) except as provided in clause (ii), 

8 any actual damages to the borrower as a result 

9 of the failure; or 

10 ‘‘(ii) in the case of an action for a failure 

11 to comply with the requirements of subsection 

12 (g), 3 times any such actual damages; and’’; 

13 and 

14 (2) in paragraph (2), by striking subparagraph 

15 (A) and inserting the following new subparagraph: 

16 ‘‘(A)(i) except as provided in clause (ii), 

17 any actual damages to each of the borrowers in 

18 the class as a result of the failure; or 

19 ‘‘(ii) in the case of an action for a failure 

20 to comply with the requirements of subsection 

21 (g), 3 times any such actual damages; and’’. 

22 SEC. 3. FINE FOR FAILURE TO MAKE PAYMENTS FROM ES23 CROW ACCOUNT RESULTING IN LAPSE IN IN24 SURANCE COVERAGE. 

25 Section 6 of the Real Estate Settlement Procedures 

26 Act of 1974 (12 U.S.C. 2605) is amended—
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1 (1) by redesignating subsections (h) through (j) 

2 as subsections (i) through (k), respectively; and 

3 (2) by inserting after subsection (g) the fol4 lowing new subsection: 

5 ‘‘(h) FINE FOR FAILURE TO MAKE PAYMENTS FROM

6 ESCROW ACCOUNT RESULTING IN LAPSE IN INSURANCE

7 COVERAGE.—

8 ‘‘(1) IN GENERAL.—If the servicer of a feder9 ally related mortgage loan collects payments from 

10 the borrower for deposit into an escrow account for 

11 the purpose of assuring payment of insurance pre12 miums and a failure by the servicer to make timely 

13 payments from the escrow account for such insur14 ance premiums results in a lapse in such insurance 

15 coverage for any period of time, the Secretary shall 

16 assess against the servicer a civil penalty of $1,000 

17 for each full or partial day of such lapse. 

18 ‘‘(2) USE OF AMOUNTS.—The amounts col19 lected by the Secretary from fines under this section 

20 shall be available to the Secretary, to the extent pro21 vided in appropriation Acts, as follows: 

22 ‘‘(A) DOWNPAYMENT ASSISTANCE.—90 

23 percent of any such amounts shall be available 

24 only for the Secretary to carry out a program 

25 to provide assistance to low-income families (as 
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1 such term is defined in section 3(b) of the 

2 United States Housing Act of 1937 (42 U.S.C. 

3 1437a(b)) for use as downpayments for the ac4 quisition of principal residences. 

5 ‘‘(B) CONSUMER ADVOCACY ASSIST6 ANCE.—10 percent of any such amounts shall 

7 be available only for the Secretary to provide 

8 assistance for nonprofit organizations that en9 gage in legal advocacy activities relating to pro10 tection of consumer rights, which shall be se11 lected by the Secretary in consultation with the 

12 Attorney General.’’.

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