Rules to require refunds of escrow overpayments
Millions of homeowners who were forced to pay too much money into mortgage escrow accounts stand to get at least $1.5 billion in refunds under new government rules unveiled last week.
The Department of Housing and Urban Development also estimated that future homebuyers will save $477 million a year in closing costs, or up to $250 less each when closing on a new home.
The Maryland Attorney General's Office estimated, based on HUD figures, that about 200,000 homeowners in Maryland will be due refunds of about $150. But the figure could be three times that amount, based on data collected by a group of state attorneys general, said Attorney General J. Joseph Curran Jr.
The HUD rules take effect April 27, 1995, for mortgages acquired after that date, and October 1997 for existing mortgages, so homeowners may not see refunds for several years.
The new standards -- under the Real Estate Settlement Procedures Act (RESPA) -- limits the amount lenders may require borrowers to deposit in escrow accounts when purchasing a home. Lenders establish such accounts to ensure that homebuyers pay taxes, insurance and other loan-related charges time.
The rules change the accounting method used to calculate escrow accounts, which officials say will be more favorable to the borrower.
In addition, at the end of the accounting year, if an escrow account has more than $50 left, the money will be refunded. If the amount is $50 or less, the money will be credited toward the borrower's escrow payments for the following year.
HUD also will require "annual escrow account statements, similar to bank statements," that let consumers "better monitor activity in their escrow accounts."
Mr. Curran said that some lenders had issued loans with contracts that permitted only one month of escrow cushion, or in some cases no cushion, but still kept two months of cushion because HUD rules allowed it. The new rules prohibit this, Mr. Curran said.
Companies to replace faulty plastic plumbing
Three companies that manufactured resin products used to make plastic plumbing installed in about 6 million homes throughout the United States have agreed to pay at least $750 million to replace those pipes that have leaked since installations began in 1978.
The gray polybutylene pipe, sold under various brand names, was made with resins supplied by Shell Oil Co., E.I. du Pont de Nemours & Co., and Hoechst Celanese.
The companies reached a proposed settlement last week that may not be approved by the U.S. District Court in Houston for another year.
If it is approved, Trial Lawyers for Public Justice, the organization that reached the settlement with the three companies, said it planned a nationwide publicity campaign to notify those people who may qualify to have their plumbing replaced.
The organization said the settlement would fully compensate homeowners who join in the class-action suit for repair costs as well as property damage that may have resulted from leaking pipes.
The settlement does not cover leaks that have occurred in new homes where the warranty on the home is still in effect.
Milloy is designated Remodeler of the Year
Cynthia Milloy of Oaken Hammer Design and Remodeling was named last week 1994 Remodeler of The Year by The Remodelors Council of the Home Builders Association of Maryland.
Ms. Milloy was cited for "demonstrating the highest level of professionalism, credibility, quality construction and contribution to the remodeling industry."
Paul Gentzel of Sinclair Suppy Co. won Remodeling Associate of the Year honors.
* Best Kitchen: Adkim Builders Inc., the Chippewa kitchen addition in Baltimore, architect Jessie Oliver.
* Best Bathroom: Shelley Construction Inc., Ponsi bathroom remodel in Timonium.
* Best Residential ($9,999 and under): JNJ Improvements Inc., Shea portico in Severna Park.
* Best Residential ($10,000 to $24,999): Coastal Builders Inc., Brown family room expansion and updated kitchen/breakfast area in Columbia, architect Jim Molinelli.
* Best Residential ($25,000 to $49,999): Buschman Design-Build, Thomas garage addition with a balcony accessible from the master bedroom in Columbia, Sinex Design Architects.
* Best Residential ($50,000 to $75,999) and "Project of the Year": Adkim Builders Inc., Weather Hills addition with fourth bedroom, additional bath and family room in Hunt Valley.
* Best Residential ($76,000 to $99,999): Robert Kutnerr Associates Inc., exercise room/home theater and walk-in closets above the garage with vestibule connecting to master bedroom in the Berlin residence in Baltimore.
* Best Residential ($100,000 to $149,999): Szpara Residential Design, 1,100-square-foot, two-story enlargement and partial interior renovation at the Smith addition in Annapolis, Schulz Contracting.
* Best Commercial: Coastal Builders Inc., addition connecting main house occupied by the Catonsville Historical Society to an existing garage, architect J. Robert Carroll.
* Best Adaptive Use: Valley Contractors Inc., converting the 135-year-old Smith's Tavern in Phoenix into the VME Future Home/Ward residence, Sharon Havens of Art Details, architect and interior designer, Ward family, landscape designer.
* Best Outdoor Living: JNJ Improvements Inc., several levels of decks and trellises for the back yard of a Severna Park home, architect Scott Allen of Allen & Associates.
* Best Details: Wheatley Associates Inc. and in-house architect Magda Westerhout, new facade for a former Otterbein carriage house in Baltimore.
NEWS IN BRIEF
* The Baltimore Chapter of the American Institute of Architects recently presented 1994 Residential Design Awards to Kaplan Sutton & Associates, for renovating and building an addition to an Annapolis home, and Studio 3 Architects for the Carp residence in Annapolis.
Builder's 1st Choice has been chosen to handle the sales and marketing of 100 garage townhomes being built by Columbia Builders in Clary's Forest in Columbia. The sales agent at the new community will be Diana Curtiss.