Mortgage Escrow Account Act

P.A. 94-0050 (H.B. 1428): Amends code sections 765 ILCS 910/2 and 765 ILCS 910/4; adds code section 765 ILCS 910/15. Effective January 1, 2006.

Public Act 94-0050 (the Act), formerly House Bill 1428, amends the Mortgage Escrow Account Act in several ways. First, the Act deletes from the definition of a mortgage lender for the purposes of the Mortgage Escrow Account Act "building and loan associations" and broadens the definition to include savings banks, credit unions, mortgage bankers and any institutions that service loans including successors in interest.

Second, the Act makes compliance with the Mortgage Escrow Account Act mandatory for mortgage lenders who service mortgages on single-family owner-occupied residential property. Compliance with the Mortgage Escrow Account Act continues to be mandatory for mortgage lenders who grant mortgages to single family owner-occupied residential property.

Finally, the Act creates a new section to the Mortgage Escrow Account Act that mandates notice to a borrower when mortgage lenders pay the taxes on the mortgaged property from an escrow account. Within 45 days of payment of the taxes, the lender must inform the borrower of the date when and the amount of taxes paid as well as the property description used for the assessment and taxation of the property. Notice may be provided in an e-mail or facsimile, on the telephone, or "delivered, mailed, or transmitted by any usual means of communication." When there is more than one borrower to a mortgage loan, only the borrower most liable for the loan needs to be notified.

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