Minnesota Session Laws - 1998, Regular Session

                            CHAPTER 344-S.F.No. 2489 
                  An act relating to commerce; regulating residential 
                  mortgage loans; establishing table funding 
                  requirements; proposing coding for new law in 
                  Minnesota Statutes, chapter 82. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  [82.176] [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 10.  
           (c) "Collected funds" means funds deposited, finally 
        settled, and credited to the closing agent's escrow account. 
           (d) "Established business relationship" means that the 
        closing agent has performed at least 25 residential closings on 
        behalf of the lender. 
           (e) "Federally insured financial institution" means an 
        institution in which monetary deposits are insured by the 
        Federal Deposit Insurance Corporation or National Credit Union 
        Administration.  
           (f) "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. 
           (g) "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, certified checks, bank money orders, 
        or teller's checks 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.  
           (h) "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.  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. 
           (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. 
           Presented to the governor March 27, 1998 
           Signed by the governor March 31, 1998, 11:00 a.m.