Interest on insurance draft deposits in escrow with mortgage investing institutions

§ 5-602. Interest on insurance draft deposits in escrow with mortgage investing institutions. Any mortgage investing institution which maintains an escrow account pursuant to any agreement executed in connection with a mortgage or any loan, secured by a lien on any one to six family residence occupied by the owner or on any property owned by a cooperative apartment corporation, as defined in subdivision twelve of section three hundred sixty of the tax law, (as such subdivision was in effect on December thirtieth, nineteen hundred sixty), and located in this state and which residence or cooperative apartment corporation received from an insurance carrier a draft, forwarded to a mortgage investing institution, as compensation for damage done to a residence shall, for each quarterly period in which such escrow account is established, credit the same with dividends or interest at a rate of not less than two per centum per year based on the average of the sums so paid for the average length of time on deposit or a rate prescribed by the superintendent of financial services pursuant to section fourteen-b of the banking law and pursuant to the terms and conditions set forth in that section whichever is higher. The superintendent of financial services shall prescribe by regulation the method or basis of computing any minimum rate of interest required by this section and any such minimum rate shall be a net rate over and above any service charge that may be imposed by any mortgage lending institution for maintaining an escrow account. No mortgage investing institution shall impose a service charge in connection with the maintenance of an escrow account unless provision therefor was expressly made in a loan contract executed prior to the effective date of this section.