Sec. 49-2c. Exceptions.
Sec. 49-2c. Exceptions. (a) In no event shall interest be required to be paid on
escrow accounts where (1) there is a contract between the mortgagor and the mortgagee,
entered into before October 1, 1975, which contains an express disclaimer of an obligation on the part of the mortgagee to pay interest on the accounts, (2) the payment of
such interest would violate any federal law or regulation, (3) the accounts are maintained
with a mortgage servicing company, neither affiliated with nor owned in whole or in
part by the mortgagee, under a written contract or any mortgage agreements underlying
the contracts, entered into before October 1, 1975, which contract does not permit the
mortgage servicing company to earn or receive a return from the investment of the
accounts or (4) the accounts are maintained in connection with mortgage loans entered
into (A) on and after October 1, 1977, and before January 1, 1989, and which are serviced
and held for sale for not more than one year by a mortgage servicing company, neither
affiliated with nor owned in whole or in part by the purchaser of the mortgage loan, and
(B) on and after January 1, 1989, and which are serviced and held for sale for not more
than six months by any such mortgage servicing company, provided such mortgage
servicing company shall pay interest on an escrow account maintained in connection
with such mortgage loan if the loan is sold within such specified periods and the mortgage
servicing company continues to service the loan.
(b) In no event shall interest be required to be paid at a rate in excess of two per
cent per annum where (1) there is a contract between the mortgagor and the mortgagee
entered into before October 1, 1977, which contains an express agreement to pay interest
at the rate of two per cent per annum, or (2) such accounts are maintained in connection
with mortgage loans entered into prior to October 1, 1977, and which are serviced and
held for sale for not more than one year by a mortgage servicing company, neither
affiliated with nor owned in whole or in part by the purchaser of the mortgage loan.
(P.A. 75-385, S. 2; P.A. 77-355, S. 2; P.A. 78-23; P.A. 79-602, S. 85; P.A. 88-271, S. 2, 3.)
History: P.A. 77-355 added Subdiv. (4) re accounts maintained in connection with mortgage loans entered into on and
after October 1, 1977, and added Subsec. (b) re exceptions to 2% interest rate; P.A. 78-23 referred to accounts serviced
"and" held for sale rather than accounts serviced "or" held for sale in Subsecs. (a)(4) and (b)(2); P.A. 79-602 substituted
"the" for "such" throughout section; P.A. 88-271 amended Subdiv. (4) by adding the words "and before January 1, 1989"
in Subpara. (A) and adding a new Subpara. (B) re payment of interest on escrow accounts by mortgage servicing company
when the loan is sold within certain specified periods and the company continues to service the loan.