Homeowners’ Escrow Savings Act
- Bill Number
- S. 4636
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 2
- Policy Area
- Housing and Community Development
- Status
- Introduced
- Latest Action
- 2026-05-21: Read twice and referred to the Committee on Homeland Security and Governmental Affairs.
- Last Updated
- 2026-07-01T16:19:14Z
AI-Generated Summary
Summary of S. 4636: Homeowners' Escrow Savings Act
Purpose
This legislation amends the Real Estate Settlement Procedures Act of 1974 to require mortgage servicers to pay interest on funds held in escrow accounts for federally related mortgage loans, aiming to provide financial benefits to borrowers from these balances.
Key Provisions
- Definition of "reasonably anticipated": Adds a new definition in the Act for estimating taxes, including factors like property reassessments, improvements, tax rate changes, borrower eligibility for exemptions, and other relevant information available to the servicer or required by the Bureau of Consumer Financial Protection.
- Accuracy of escrow statements: Requires that annual escrow account statements be as accurate as possible based on information reasonably known or accessible to the servicer.
- Mandatory interest payments: Servicers must pay interest on escrow funds, calculated monthly using the actual average daily balance multiplied by one-twelfth of the annual rate based on the weekly average yield of 1-year U.S. Treasury securities (rounded to the nearest tenth of a percent).
- Crediting of interest: Interest must be credited to the escrow account at the time the required statement is issued.
- State law protections: The provision does not override state laws requiring higher interest rates or alternative payment methods, such as checks or credits to the loan balance.
Significant Changes to Existing Law
- Introduces a federal requirement for interest payments on escrow balances, which was not previously mandated under the Real Estate Settlement Procedures Act of 1974.
- Establishes a standardized minimum interest rate tied to Treasury yields, while allowing states to impose stricter rules.
- Adds new accuracy standards for escrow statements and a detailed definition to guide tax estimations.
Potential Impacts
- On citizens: Homeowners with escrow accounts could receive modest interest earnings, potentially increasing their savings from mortgage-related funds.
- On government agencies: The Bureau of Consumer Financial Protection may see expanded oversight responsibilities for compliance; the U.S. Treasury's securities yields would directly influence the interest rates used.
- On international relations: No direct effects identified in the legislation.
Main Stakeholders Affected
- Borrowers: Homeowners with federally related mortgage loans who maintain escrow accounts.
- Mortgage servicers: Entities responsible for managing escrow accounts and now required to calculate and pay interest.
- State governments: Retain authority to enforce or expand their own escrow interest rules.
- Bureau of Consumer Financial Protection: Involved in potential regulatory guidance on the new requirements.
Notable Legal, Constitutional, or Political Implications
- Raises questions about federal preemption of state authority in consumer financial matters, though the bill explicitly preserves state laws offering greater protections.
- May influence contract terms between borrowers and servicers by imposing new obligations on escrow management.
- No explicit constitutional issues addressed, but it touches on property rights related to interest earned on held funds.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Sen. Blumenthal, Richard [D-CT]
Cosponsors (1)
Recent Actions
- 2026-05-21: Read twice and referred to the Committee on Homeland Security and Governmental Affairs.
- 2026-05-21: Introduced in Senate
Bill Versions
- Homeowners’ Escrow Savings Act — issued 2026-05-21 — PDF (4 pages)