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Can HUD require lenders to pay interest on escrow accounts?

April 26, 2017accounts escrow HUD lenders pay require

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Can HUD require lenders to pay interest on escrow accounts?

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No. In 1992 and 1993, legislation was introduced in Congress that would have required lenders to pay interest on escrow account balances, but it never passed. Some states do require interest to be paid on escrow account funds, but many do not.

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Everything you need to know about escrow accounts. … RESPA does not require lenders to impose an escrow account on borrowers; however, certain government loan programs (for example, FHA and VA loans) or lenders may require escrow accounts as a condition of the loan.