SF 2489

2nd Engrossment - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to commerce; regulating residential mortgage 
  1.3             loans; establishing table funding requirements; 
  1.4             proposing coding for new law in Minnesota Statutes, 
  1.5             chapter 82. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  [82.176] [TABLE FUNDING.] 
  1.8      Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
  1.9   section, the terms in this subdivision have the meanings given 
  1.10  them.  
  1.11     (b) "Closing agent" has the meaning given in section 82.17, 
  1.12  subdivision 10.  
  1.13     (c) "Collected funds" means funds deposited, finally 
  1.14  settled, and credited to the closing agent's escrow account. 
  1.15     (d) "Established business relationship" means that the 
  1.16  closing agent has performed at least 25 residential closings on 
  1.17  behalf of the lender. 
  1.18     (e) "Federally insured financial institution" means an 
  1.19  institution in which monetary deposits are insured by the 
  1.20  Federal Deposit Insurance Corporation or National Credit Union 
  1.21  Administration.  
  1.22     (f) "Lender" means a person who makes residential mortgage 
  1.23  loans including a person who engages in table funding.  "Lender" 
  1.24  does not include any organization described in section 501(c)(3) 
  1.25  or 501(c)(4) of the Internal Revenue Code of 1986, as amended, 
  2.1   if the organization is exempt from tax under section 501(a) of 
  2.2   the Internal Revenue Code of 1986, as amended.  "Lender" does 
  2.3   not include a state or any political subdivision of a state. 
  2.4      (g) "Qualified loan funds" means funds in one of the 
  2.5   following forms:  
  2.6      (1) lawful money of the United States; 
  2.7      (2) wired funds when unconditionally held by the closing 
  2.8   agent; 
  2.9      (3) cashier's checks, certified checks, bank money orders, 
  2.10  or teller's checks issued by a federally insured financial 
  2.11  institution and unconditionally held by the closing agent; and 
  2.12     (4) United States treasury checks, Federal Reserve Bank 
  2.13  checks, federal home loan bank checks, and state of Minnesota 
  2.14  warrants.  
  2.15     (h) "Table funding" means a closing or settlement at which 
  2.16  a mortgage loan is funded by a lender by a contemporaneous 
  2.17  advance of mortgage loan funds and an assignment of the mortgage 
  2.18  loan to the lender advancing the funds.  
  2.19     Subd. 2.  [REQUIREMENTS.] (a) A closing agent shall not 
  2.20  make disbursements out of an escrow, security deposit, 
  2.21  settlement, or closing account unless the funds received from 
  2.22  the lender are collected funds or qualified loan funds.  This 
  2.23  subdivision does not prohibit a closing agent from electing to 
  2.24  disburse out of an escrow, security deposit, settlement, or 
  2.25  closing account, other than with collected funds or qualified 
  2.26  loan funds, if the closing agent has an established business 
  2.27  relationship with the lender on whose behalf the closing is 
  2.28  being conducted. 
  2.29     (b) A lender, using the closing services of a closing 
  2.30  agent, shall at or before the time of the closing deliver loan 
  2.31  funds to the closing agent either in the form of collected funds 
  2.32  or qualified loan funds.