Except as provided in Subsection (2), each lender requiring the establishment or continuance of a reserve account in connection with an existing or future real estate loan shall, on a yearly basis as of December 31, calculate and credit to the account interest on the average daily balance of funds deposited in the account at a rate equal to:
Terms Used In Utah Code 7-17-3
Bank: means a person authorized under the laws of this state, another state, or the United States to accept deposits from the public. See Utah Code 7-1-103
Borrower: means any person who becomes obligated on a real estate loan at the time of origination of such loan and includes mortgagors, trustors under trust deeds and vendees under conditional land sales contracts. See Utah Code 7-17-2
Continuance: Putting off of a hearing ot trial until a later time.
Depository institution: means a bank, savings and loan association, savings bank, industrial bank, credit union, or other institution that:
(a)
holds or receives deposits, savings, or share accounts;
(b)
issues certificates of deposit; or
(c)
provides to its customers other depository accounts that are subject to withdrawal by checks, drafts, or other instruments or by electronic means to effect third party payments. See Utah Code 7-1-103
Guarantor: A party who agrees to be responsible for the payment of another party's debts should that party default. Source: OCC
Lender: means any person who regularly makes, extends or holds real estate loans and includes, but is not limited to, mortgagees, beneficiaries under trust deeds and vendors under conditional land sales contracts and who regularly require or maintain reserve accounts. See Utah Code 7-17-2
Real estate loan: means any agreement providing for a loan secured by an interest in real estate in this state containing a residential structure of not more than four housing units, at least one of which is the primary residence of the borrower and includes, but is not limited to, agreements secured by mortgages, trust deeds, and conditional land sales contracts. See Utah Code 7-17-2
Reserve account: means any account, whether denominated escrow, impound, trust, pledge, reserve or otherwise, which is established in connection with a loan secured by an interest in real estate located in this state, whether or not a real estate loan as defined in this chapter, and whether incorporated into the loan agreement or a separate document, whereby the borrower agrees to make periodic prepayment to the lender or its designee of taxes, insurance premiums or other charges pertaining to the property securing the loan and the lender or its designee agrees to pay the taxes, insurance premiums or other charges out of the account on or before their due date. See Utah Code 7-17-2
Service charge: means any direct fee imposed in connection with the administration of a reserve account. See Utah Code 7-17-2
(a)
5-1/2%;
(b)
the average of the 11th District monthly weighted average cost of funds index as calculated and published by the Federal Home Loan Bank of San Francisco during the calendar year, less 1-1/2 percentage points; or
(c)
the statement savings rate or share account rate offered to the public for accounts of like size by the depository institution holding the reserve account.
a reserve account required by a governmental insurer or guarantor of the loan as a condition of insurance or guaranty;
(b)
a reserve account maintained in connection with a real estate loan in an original principal amount exceeding 80% of the lender’s appraised value of the property at the time the loan is made, until the principal balance of the loan is paid down to 80% of the lender’s appraised value at the time of the loan; or
(c)
payment of interest or other compensation to the borrower if this payment is prohibited by federal law or regulations.
(3)
A lender may not require or impose a service charge for the administration of a reserve account.
