SF 3594

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to commerce; regulating real estate transactions; defining terms;
regulating closing agents; amending Minnesota Statutes 2006, sections 68A.04;
82.17, subdivision 3; 82.49.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2006, section 68A.04, is amended to read:

68A.04 deleted text begin DEFINITION OF DIRECT RISK PREMIUMS deleted text end new text begin DEFINITIONS new text end .

new text begin Subdivision 1. new text end

new text begin Direct risk premiums. new text end

For purposes of this chapter, "direct risk
premiums" means the charge for title insurance made by a title insurance company or its
agents according to the company's rate filing approved by the commissioner of commerce
without a deduction for commissions paid to or retained by the agent and is that portion of
the fee charged by a title insurance company to an insured or an applicant for insurance
for the assumption by the title insurance company of the risk created by the issuance
of the title insurance policy. Direct risk premiums of a title insurance company do not
include any other charge or fee for abstracting, searching, or examining the title, or for
escrow, closing, or other related services.

new text begin Subd. 2. new text end

new text begin Title insurance. new text end

new text begin For purposes of this chapter, "title insurance" means
insuring or indemnifying owners of real or personal property, the holders of liens or
encumbrances on the personal property, or others interested in the personal property
against the unmarketability of the title to the property; the invalidity, impairment, or
unenforceability of any liens or encumbrances on the property; or the doing, or proposing
to do, any business in substance equivalent to any of the foregoing whether or not designed
to evade the provisions of this chapter.
new text end

Sec. 2.

Minnesota Statutes 2006, section 82.17, subdivision 3, is amended to read:

Subd. 3.

Closing agent; real estate closing agent.

"Closing agent" or "real estate
closing agent" means any person whether or not acting as an agent for a title company, a
licensed attorney, real estate broker, or real estate salesperson, who for another and with or
without a commission, fee, or other valuable consideration or with or without the intention
or expectation of receiving a commission, fee, or other valuable consideration, directly or
indirectly provides closing services incident to the sale, trade, lease, or loan of residential
real estate, including new text begin in the ordinary course of business, the acknowledgment of deeds and
for other services of a notary public as authorized by law, new text end drawing or assisting in drawing
papers incident to the sale, trade, lease, or loan new text begin of residential real estate new text end , or advertises or
claims to be engaged in these activities.

Sec. 3.

Minnesota Statutes 2006, section 82.49, is amended to read:

82.49 TABLE FUNDING.

Subdivision 1.

Definitions.

(a) For purposes of this section, the terms in this
subdivision have the meanings given them.

(b) "Closing agent" has the meaning given in section 82.17, subdivision 3.

(c) "Collected funds" means funds deposited, finally settled, and credited to the
closing agent's escrow account.

deleted text begin (d) "Established business relationship" means that the closing agent has performed
at least 25 residential closings on behalf of the lender.
deleted text end

deleted text begin (e) deleted text end new text begin (d) new text end "Federally insured financial institution" means an institution in which
monetary deposits are insured by the Federal Deposit Insurance Corporation or National
Credit Union Administration.

deleted text begin (f) deleted text end new text begin (e) new text end "Lender" means a person who makes residential mortgage loans including
a person who engages in table funding. "Lender" does not include any organization
described in section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as
amended, if the organization is exempt from tax under section 501(a) of the Internal
Revenue Code of 1986, as amended. "Lender" does not include a state or any political
subdivision of a state.

deleted text begin (g) deleted text end new text begin (f) new text end "Qualified loan funds" means funds in one of the following forms:

(1) lawful money of the United States;

(2) wired funds when unconditionally held by the closing agent;

(3) cashier's checks deleted text begin , certified checks, bank money orders, or teller's checks deleted text end issued by
a federally insured financial institution and unconditionally held by the closing agent; and

(4) United States treasury checks, Federal Reserve Bank checks, federal home loan
bank checks, and state of Minnesota warrants.

deleted text begin (h) deleted text end new text begin (g) new text end "Table funding" means a closing or settlement at which a mortgage loan
is funded by a lender by a contemporaneous advance of mortgage loan funds and an
assignment of the mortgage loan to the lender advancing the funds.

Subd. 2.

Requirements.

(a) A closing agent shall not make disbursements out of an
escrow, security deposit, settlement, or closing account unless the funds received from
the lender are collected funds or qualified loan funds. deleted text begin This subdivision does not prohibit
a closing agent from electing to disburse out of an escrow, security deposit, settlement,
or closing account, other than with collected funds or qualified loan funds, if the closing
agent has an established business relationship with the lender on whose behalf the closing
is being conducted.
deleted text end

(b) A lender, using the closing services of a closing agent, shall at or before the time
of the closing deliver loan funds to the closing agent either in the form of collected funds
or qualified loan funds.