By the Division of Banks

Exemptions From The Requirement That Mortgagees Pay Interest On Tax Escrow Accounts

Mass. Gen. Laws chapter 183, section 61 requires mortgagees, holding first mortgages on owner-occupied, 1-4 family homes, who require advance payments of real estate taxes on the property, to pay interest on such advance payments. The interest is to be paid once per year at a rate of interest and in a manner to be determined by each mortgagee. Such mortgagees must file annual reports to the Division showing the interest paid on each account and other related financial information. The Division maintains as public record those annual reports.

The Division references, in Opinion # 95-106, the well-settled position that federal thrift institutions need not comply with the interest payment or reporting requirements of said section 61, and that any filing of that information would be strictly on a voluntary basis.