Banking Interpretations


May 10, 2007


Dear Mr. [---]:

Your inquiry to the New York State Banking Department ("the Department"), regarding any requirement that your customers escrow their real estate taxes, has been referred to me for response.
In your letter, dated April 17, 2007, you requested an opinion from the Department on whether the New York State Banking Law ("NYBL") requires your customers, who carry and escrow private mortgage insurance, to also escrow their real estate taxes.  For purposes of responding to your inquiry, I am assuming that the customers that you refer to are customers seeking a residential mortgage.  There are no requirements within the NYBL or the General Regulations of the Banking Board that require your customers to place their real estate taxes in escrow as part of a condition to receiving a residential mortgage in New York state.  However, I note that, if you do intend to maintain any escrow accounts pursuant to any agreement executed in connection with a residential mortgage, you may wish to refer to NYBL section 6-k, Real Property Law Section 953 and Insurance Law Section 6503, dealing with the duties and responsibilities of the mortgage investing institutions.

I trust that this has been helpful. Please contact me at (212) 709-1674 if you have any additional questions.

Very truly yours,

Megan Prendergast