286.8-130 Escrow account -- Interest -- Accounting.
(1)
(2)
(3)
(4)
(5)
(6)
All moneys paid to the mortgage loan company for payment of taxes or insurance
premiums on property which secures any loan made or serviced by the mortgage
loan company shall be deposited in an account which is insured by the Federal
Deposit Insurance Corporation or any other account acceptable to the Federal
National Mortgage Association or the United States Department of Housing and
Urban Development or the Government National Mortgage Association or the
United States Department of Veterans Affairs and kept separate, distinct, and apart
from funds that belong to the mortgage loan company. The funds, when deposited,
shall be designated as an "escrow account" or under some other appropriate name
indicating that the funds are not the funds of the mortgage loan company.
Any interest earned on funds deposited into an escrow account under subsection (1)
shall belong to the borrower and shall be applied to the expenses to be paid from the
account.
The mortgage loan company shall, upon reasonable notice, account to any debtor
whose property secures a loan made by the mortgage company for any funds which
that person has paid to the mortgage loan company for the payment of taxes or
insurance premiums on the property in question.
The mortgage loan company shall, upon reasonable notice, account to the
commissioner for all funds in the company's escrow account.
Escrow account funds shall not be subject to execution or attachment on any claim
against the mortgage company. It shall be unlawful for any mortgage company to
knowingly keep or cause to be kept any funds or money in any bank under the
heading of "escrow account" or any other name designating the funds or money
belonging to the debtors of the mortgage loan company, except actual funds paid to
the mortgage loan company for the payment of taxes and insurance premiums on
property securing loans made or serviced by the company.
Payments to the debtor's escrow account shall be promptly and properly credited.
All escrowed taxes, insurance, and other items shall be paid in a timely fashion and
not later than the statutory or contractual deadline applicable thereto.
Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 778, effective July 15, 2010. -- Amended
1992 Ky. Acts ch. 77, sec. 9, effective July 14, 1992. -- Created 1980 Ky. Acts
ch. 365, sec. 14, effective July 15, 1980.
Formerly codified as KRS 294.130.
Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts
ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the
Kentucky Financial Services Code, KRS Chapter 286.
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