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90_HB0706
765 ILCS 910/5.1 new
765 ILCS 915/1 from Ch. 17, par. 5001
Amends the Mortgage Escrow Account Act. Requires a
mortgage lender to pay interest to the borrower on escrow
accounts for mortgages entered into on and after the
effective date of this amendatory Act. Amends the Mortgage
Tax Escrow Act. Provides all existing substantive provisions
of the Act apply to mortgages entered into before the
effective date of this amendatory Act. Adds language
providing that for mortgages entered into on and after the
effective date of this amendatory Act a lender may hold no
more in an escrow account than the amount of taxes and
insurance plus one-sixth of the estimated total charges
payable from the account in the next 12 months.
LRB9002659MWpc
LRB9002659MWpc
1 AN ACT concerning mortgage escrow accounts, amending
2 named Acts.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Mortgage Escrow Account Act is amended by
6 adding Section 5.1 as follows:
7 (765 ILCS 910/5.1 new)
8 Sec. 5.1. Interest payment on escrow account. A mortgage
9 lender that requires an escrow account or an escrow like
10 arrangement shall pay interest to the borrower of those
11 funds, calculated on a daily basis, at the rate the mortgage
12 lender pays to depositors of funds in ordinary savings
13 accounts. This Section shall apply to mortgages entered into
14 on and after the effective date of this amendatory Act of
15 1997.
16 Section 10. The Mortgage Tax Escrow Act is amended by
17 changing Section 1 as follows:
18 (765 ILCS 915/1) (from Ch. 17, par. 5001)
19 Sec. 1. Amount in escrow account.
20 (a) For mortgages entered into on or after the effective
21 date of this amendatory Act of 1997, a lender providing a
22 mortgage for a single family residence shall collect and hold
23 no more in an escrow account than is necessary to make
24 required tax or insurance payments or other charges when due,
25 plus, if provided in the mortgage loan instruments, an amount
26 sufficient to maintain a cushion equal to one-sixth of an
27 amount that the lender reasonably estimates will be the total
28 amount of charges payable from the escrow account during the
29 ensuing 12 month period under normal practice.
-2- LRB9002659MWpc
1 (b) For mortgages entered into before the effective date
2 of this amendatory Act of 1997, no agreement for the mortgage
3 of a single-family residence shall contain any requirement
4 that the mortgagor of the residence shall maintain in any
5 escrow account for the payment of real property taxes or in
6 any escrow-like arrangement for the same purpose any amount
7 of money greater than 150% of the previous year's assessed
8 real property tax upon the real property in regard to which
9 the account is maintained, except in the first year of the
10 mortgage's life.
11 (Source: P.A. 79-726.)