The bill introduces a new chapter to Title 61 RCW concerning residential mortgage loan escrow accounts. It defines key terms such as "mortgage loan servicer" and "residential mortgage loan," establishing the framework for the regulation of these entities. A mortgage loan servicer is defined as an entity responsible for collecting payments on mortgage loans, while a residential mortgage loan is characterized as a loan secured by a dwelling for personal use.

Beginning January 1, 2027, the bill mandates that mortgage loan servicers must pay borrowers at least two percent simple interest per annum on funds held in escrow accounts for taxes and insurance related to residential mortgage loans secured by properties with one to four units. Additionally, servicers are prohibited from imposing any fees that would reduce the interest rate below the mandated two percent. This requirement applies only to residential mortgage loans executed on or after the specified date.