New York Codes, Rules and Regulations › Title 3 - BANKING › Chapter I - GENERAL REGULATIONS OF THE SUPERINTENDENT › Part 10 - Payment Of Interest On Mortgage Escrow Accounts And Insurance Draft Escrow Accounts › Section 10.1 - Method of computing and crediting interest

Current through Register Vol. 46, No. 28, July 10, 2024
(a) The term mortgage escrow account, for the
				purposes of this Part, shall include any account established pursuant to an
				agreement between a mortgagor and a mortgage investing institution whereby the
				mortgagor pays to the mortgage investing institution or its designee amounts to
				be used for the payment of real estate taxes, school taxes, insurance premiums,
				water rents or any similar charges, except that the term mortgage escrow
				account shall not be deemed to include payments made to a mortgage investing
				institution for such purposes which are used to reduce the principal of the
				mortgage at the time they are received provided that the effective rate of
				interest thus accorded the mortgagor is no less than the rate of interest
				established from time to time pursuant to section 5-601  of the General Obligations Law and
				section 14-b  of the Banking Law. The term insurance
				draft escrow account, for the purposes of this Part, shall include any account
				established pursuant to an agreement between a mortgagor and a mortgage
				investing institution whereby the mortgage investing institution receives from
				an insurance carrier a draft as compensation for damage done to a mortgaged
				residence.
(b) Interest on a
				mortgage escrow account as required by section 5-601  of the General Obligations Law and
				section 14-b  of the Banking Law or an insurance
				draft escrow account as required by section 5-602  of the General Obligations Law and
				section 14-b  of the Banking Law shall be computed
				on the daily balances in such account from the date the funds are received to
				the date the funds are disbursed and shall be credited to the escrow account as
				of the last business day of each quarter of a calendar year or of each quarter
				of a fiscal year. In computing the interest to be credited, debit balances
				resulting from advances made by the mortgage investing institution may be taken
				into account. At least once each year the mortgage investing institution shall
				render a statement to the mortgagor specifically indicating the interest on the
				mortgage escrow account or insurance draft escrow account which has been
				credited during the period covered by such statement.
(c) In the event that a mortgage escrow
				account or insurance draft escrow account shall be closed or discontinued
				before the last business day of a calendar quarter, or the last business day of
				a fiscal quarter, interest shall be computed and credited from the day as of
				which interest was last credited through the day on which the account is closed
				or discontinued.
(d) For the
				purposes of computing interest pursuant to subdivisions (b) and (c) of this
				section, the mortgage investing institution shall take into account the actual
				number of days in each quarter, as well as the actual number of days in each
				calendar year or, may elect to compute the interest on the basis of a 30- day
				month and 360-day year.