This bill would create a new chapter in Title 61 RCW establishing definitions and requirements for residential mortgage loan escrow accounts. Beginning January 1, 2027, mortgage loan servicers must pay borrowers at least 2% simple interest per year on funds collected in advance for taxes and insurance and held in escrow for residential mortgage loans secured by Washington real property of one to four units. The interest requirement applies only to loans executed on or after January 1, 2027. The bill also prohibits servicers from charging any fee or other charge in connection with maintenance or disbursement of escrow money if the fee would result in an effective interest rate below the required 2% simple interest per annum. It defines "mortgage loan servicer" and "residential mortgage loan" for purposes of the chapter and names the House Consumer Protection & Business Committee as the referral committee. The act is a new-law enactment (adds a new chapter to Title 61 RCW) imposing a financial and procedural obligation on servicers; it does not, in the provided text, specify any enforcement mechanisms, penalties, remedies, administrative oversight, or rulemaking authority. The text specifies “simple interest” but does not provide calculation methods, payment timing, a chapter number, a definition of when a loan is “executed,” exceptions, or interactions with federal law; those details are not present in the extracted facts.

If enacted, homeowners in Washington who take out new residential mortgages on oneto four-unit properties starting January 1, 2027, would start earning at least 2% simple interest annually on any escrow funds collected for taxes and insurance, and servicers could not impose fees on those escrow accounts that bring the effective interest below 2%. Borrowers would likely see modest additional income on escrow balances, while mortgage servicers would face a new expense to pay that interest and lose the ability to offset it with escrow-related fees, which could change servicer pricing or operational practices and have downstream effects for lenders or investors tied to servicing arrangements. Key implementation details are missing from the text provided—most importantly how the simple interest must be calculated and credited, what exactly counts as a loan “executed” on or after January 1, 2027, and what enforcement, penalties, or interactions with federal law will apply—so the practical administrative and compliance burdens on servicers and the timing of borrower benefit remain uncertain.