CT HB05414

Eliminates the minimum 1.5% interest rate floor for tax and insurance escrow accounts held by banks, savings institutions, and mortgage servicers, effective October 1, 2012

Requires interest payments on escrow funds to be calculated using the deposit index (rounded to nearest one-tenth of one percentage point) with no minimum rate floor after September 30, 2012

Applies only to mortgages on owner-occupied residential properties with no more than four living units and housing cooperatives

Interest continues to be credited annually on December 31st toward payment of taxes or insurance premiums in the following year

Maintains existing penalties of up to $100 per violation for non-compliance