1. Archive

Homeowners to get refunds

Homeowners who have been required to overpay their home-loan escrow accounts will be getting refunds.

The Department of Housing and Urban Development said Wednesday that at least $1.5-billion will be returned.

The new standards come under the Real Estate Settlement Procedures Act. It limits the amount banks and other mortgage lenders may require borrowers to deposit in escrow accounts when purchasing a home.

Bankers, however, said the number of homeowners getting refunds would be smaller than HUD stated since many lenders already are operating under the new standards.

The rule, effective April 27, 1995, will save $477-million a year in closing costs, according to HUD.

Some home buyers could save as much as $250 in closing costs.

Lenders establish escrow accounts to ensure home buyers pay taxes, insurance and other loan-related charges on time.