I have been out of the servicing side for mortgages for quite a while now, but I have a vague recollection that the requirement to pay interest on escrow went away when the state law changed to not requiring tax escrow accounts for loans with more than 80 LTV. Is this true or did I make it up?

It's tough getting old!

Our bank continues to comply with the interest on escrow law:

M.G.L. Chapter 183, Section 61
http://www.mass.gov/legis/laws/mgl/183-61.htm

According to MA DOB opinion letter 95-106, this law does not apply to federal thrift institutions.

Hope this helps.

Thanks Sgt. Pepper! I think that the Federal exclusion was what I was remembering.... that doesn't apply to me now!