What is the formula for escrow interest in VA
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What is the formula for escrow interest in VA
Do you mean interest on escrow payments to a bank on a mortgage loan? Most banks don't pay interest on escrow. Not sure if VA law requires it.
UNLESS the lease is under the VIRGINIA RESIDENTIAL LANDLORD TENANT ACT and the resident stays longer than 12 months - there is NO interest due on security deposits.Quote:
Originally Posted by wayne cundiff
You can find the "formula" for calculating interest in the VRLTA statutes online.
The problem is that escrow payments and a security deposit are very different. We have to wait for a response to know what we are dealing with.
Actually * escrow payments are the same.
In VA, if the manager is a licensed RE broker, tenant security deposits are REQUIRED to be in what is known as an "escrow" account and so labeled with the bank... escrow in this sense means it is not the money of the property manager. The account can be a bank account and all funds of clients/tenants are placed in the account.
The term "escrow" means held by a third party which in this instance would be the bank.
Some individual property owners put their tenant deposits in interest bearing accounts/money market accounts knowing that they will have to pay interest under the VRLTA formula and often the interest on the account is greater than the interest due the tenant on the deposit.
Hello again:Quote:
Originally Posted by ScottGem
Not when the security deposit must be placed in escrow. You threw in the word "payments".
Cville is guessing that that is what this guy is asking about. I wouldn't bet against it. Not only do we have to be experts at real estate, but we have to be code breakers too.
excon
Sorry "EX" - I'm a PM in VA and don't need to guess on this issue. The fact that OP wants the "formula" indicates the information desired. The VRLTA statutes contain the "formula" which is complicated.
§ 55-248.15:2. Schedule of interest rates on security deposits.
A. The interest rate established by § 55-248.15:1 varies annually with the annual rate being equal to one percentage point below the Federal Reserve Board discount rate as of January 1 of each year. The purpose of this section is to set out the interest rates applicable under this chapter.
B. The rates are as follows:
1. July 1, 1975, through December 31, 1979, 3.0%.
2. January 1, 1980, through December 31, 1981, 4.0%.
3. January 1, 1982, through December 31, 1984, 4.5%.
4. January 1, 1985, through December 31, 1994, 5.0%.
5. January 1, 1995, through December 31, 1995, 4.75%.
6. January 1, 1996, through December 31, 1996, 5.25%.
7. January 1, 1997, through December 31, 1998, 5.0%.
8. January 1, 1999, through June 30, 1999, 4.5%.
9. July 1, 1999, through December 31, 1999, 3.5%.
10. January 1, 2000, through December 31, 2000, 4.0%.
11. January 1, 2001, through December 31, 2001, 5.0%.
12. January 1, 2002, through December 31, 2002, 0.25%.
13. January 1, 2003, through December 31, 2003, 0%.
14. January 1, 2004, through December 31, 2004, 1.0%.
15. January 1, 2005, through December 31, 2005, 2.25%.
16. January 1, 2006, through December 31, 2006, 4.25%.
Thereafter, the interest rate shall be determined in accordance with subsection B of § 55-248.15:1.
(2003, c. 438; 2006, c. 667.)
It may be an educated guess and I'm not saying you are wrong. But I don't believe its as black and white as you say. Escrow can also refer to tax and insurance payments made as part of a mortgage payment. It can also refer to payments made at closing to be used for that purpose. While security deposits do go into an escrow account, they are more usually referred to as security deposits.
So until the OP clarifies his question, we can't be sure we are giving him the correct info.
Again, the request for the "formula" was the DEFINING Clue in addition to the use of the term ESCROW with regard to the deposit.
There is no interest due on mortgage escrow deposits in VA... I have only seen that in CA.
Hello again Cville:Quote:
Originally Posted by Cvillecpm
You still don't get it. That huge chip on your shoulder has got to weigh you down. I gave you a compliment, and you insulted me. Ummh, ummh, ummh!
The fact is, the OP gave only "clues" - your word - not mine. All I said is you took the clues and guessed the right answer. And frankly, it was no more than a guess too. Scott's guess was as worthy as yours, and we still don't know what the OP really wanted. Clearly, there wasn't enough information to be definitive about it - or you wouldn't have posted the above post.
Don't worry, I don't expect an apology. I KNOW what you're made up of. Just keep the attitude to yourself!
excon
The operative word here is "clue". A clue leads one to a conclusion. Its possible for a clue to lead different people to different conclusions all of which have validity.Quote:
Originally Posted by Cvillecpm
There is no mention of a deposit in the OP. The only thing mentioned is escrow interest. Since escrow can apply to different things, its possible for different conclusions to be reached. Until we get a clarification, if we ever do, then both of us are just guessing.
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