Full Text of HB0868 94th General Assembly
HB0868ham001 94TH GENERAL ASSEMBLY
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Rep. Angelo Saviano
Filed: 4/12/2005
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| AMENDMENT TO HOUSE BILL 868
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| AMENDMENT NO. ______. Amend House Bill 868 by replacing | 3 |
| everything after the enacting clause with the following:
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| "Section 1. Short title. This Act may be cited as the | 5 |
| Mortgage Lender's
Closing Duties Act.
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| Section 5. Definitions. As used in this Act:
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| "Residential real estate", "lender", "borrower", "mortgage | 8 |
| loan",
"residential mortgage loan", "loan broker", "loan | 9 |
| originator", "loan
originating", "residential mortgage loan | 10 |
| commitment", and "escrow agent" are
defined as in the | 11 |
| Residential Mortgage License Act of 1987.
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| "Loan package" refers to any and all documentation tendered | 13 |
| by a
lender reasonably necessary to effectuate the escrow | 14 |
| closing, the execution of
which by the borrower shall permit | 15 |
| the immediate disbursement of mortgage loan
proceeds.
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| "Escrow closing" refers to the process of accepting escrow | 17 |
| funds and a
loan package by an escrow agent on a residential | 18 |
| mortgage loan and the final
disbursement of those funds, along | 19 |
| with the borrower's down payment, if any,
and the acceptance of | 20 |
| documents from the seller of the residential real
property | 21 |
| sufficient to transfer title (legal or
equitable) to the | 22 |
| subject property to the borrower; and the simultaneous
transfer | 23 |
| of the balance of such funds as may be due to the seller, or as | 24 |
| the
seller and borrower may direct, and the delivery of the |
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| documents from the
seller to the borrower, including, if | 2 |
| applicable, the placing for recording of
the deed or other | 3 |
| document intended to place the borrower in title to the
subject | 4 |
| residential real property.
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| "Investor" refers to the entity that invests money in | 6 |
| residential
mortgage loans, or ultimately provides funding | 7 |
| necessary to close a residential
mortgage financing | 8 |
| transaction.
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| "Funding" and "good funds" refer to the monetary | 10 |
| consideration provided
by a lender incident to and simultaneous | 11 |
| with the closing of a "residential
mortgage financing | 12 |
| transaction", as that term is defined and used in the
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| Residential Mortgage License Act of 1987, and shall consist of | 14 |
| cash,
a cashier's check or checks, a certified check or checks, | 15 |
| a money order or
money orders, or the electronic transfer to | 16 |
| the escrow agent of such cash,
cashier's check or checks, | 17 |
| certified check or checks, or money order or orders,
but do not | 18 |
| include a bank draft or drafts or the electronic transfer to | 19 |
| the
escrow agent of a bank draft or drafts, nor any other form | 20 |
| of funding
containing conditions precedent to the negotiation | 21 |
| of that funding.
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| "Firm written commitment for mortgage loan financing" | 23 |
| means a non-contingent written
agreement to lend to a borrower | 24 |
| good funds secured by a mortgage against a
specific parcel of | 25 |
| residential real property and which shall, at a minimum,
state | 26 |
| the amount of the loan, the rate of interest per annum, the | 27 |
| annual
percentage rate, and any loan origination and loan | 28 |
| discount fees, and shall
be subject to only the following | 29 |
| conditions:
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| (1) no material changes in the borrower's financial | 31 |
| condition;
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| (2) the lien of the mortgage being insured by a | 33 |
| licensed title insurance
company as the first and paramount | 34 |
| lien against the residential real property;
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| (3) matters of survey;
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| (4) homeowner's insurance satisfactory to the lender; | 3 |
| and
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| (5) the mortgage being funded by a date certain.
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| Section 10. Provision of loan documents. A lender or | 6 |
| investor who has
issued a firm written
commitment for mortgage | 7 |
| loan financing, upon receiving reasonable notice prior
to the
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| closing from the buyer, the seller, or the escrow closing | 9 |
| company of the date,
time, and location of the closing of the | 10 |
| purchase and sale of 1-4 family,
owner-occupied residential | 11 |
| real estate, must provide to the escrow
closer
the mortgage | 12 |
| loan documents or loan package at the time, date, and place for
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| the closing for execution by the borrower and reasonably sought | 14 |
| by that lender
as a precondition to the disbursement of | 15 |
| mortgage loan proceeds.
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| Section 15. Provision of loan funds. A lender or investor | 17 |
| who has
issued a firm written
commitment for
mortgage loan | 18 |
| financing, upon receiving reasonable notice from the buyer, the
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| seller, or the escrow closing company of the date, time, and | 20 |
| location of the
closing of the purchase and sale of 1-4 family, | 21 |
| owner-occupied residential real
estate must provide to the | 22 |
| escrow closer the necessary funding for
the mortgage loan in | 23 |
| the form of "good funds" at the time, date, and place for
the | 24 |
| closing for use by the borrower incident to the purchase and | 25 |
| sale
transaction. Incident to the funding of that mortgage | 26 |
| loan, any lender
intending to utilize an electronic transfer of | 27 |
| funding shall first secure any
necessary wire transfer | 28 |
| instructions from the escrow closer and shall advise
the | 29 |
| borrower or the borrower's designee in writing of its intention | 30 |
| to transfer
the funding for the
transaction via electronic | 31 |
| means and shall institute that electronic transfer
in | 32 |
| sufficient time so that the necessary funding will be received |
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| by the escrow
closer prior to the time and date of the escrow | 2 |
| closing.
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| Section 20. Fees to cover lender's fines prohibited. A | 4 |
| lender or investor
who has issued a firm written
commitment for
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| mortgage loan financing, upon receiving reasonable notice from | 6 |
| the buyer, the
seller, or the escrow closing company of the | 7 |
| date, time, and location of the
closing of the purchase and | 8 |
| sale of 1-4 family, owner-occupied residential real
estate may | 9 |
| not charge or attempt to charge to the borrower a fee or | 10 |
| anything of
value to offset such costs as may be incurred by it | 11 |
| as a result of the
violation by the lender of any provision of | 12 |
| this Act.
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| Section 25. Notice to investor. A notice of closing as | 14 |
| described in this Act
that is provided to a
loan
originator or | 15 |
| loan broker shall be deemed to constitute notice to any | 16 |
| investor.
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| Section 30. Closing package. | 18 |
| (a) A lender who has issued a firm written commitment for | 19 |
| mortgage loan financing shall deliver a loan package and the | 20 |
| closing funds to the title company only after:
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| (1) the lender confirms with the title company that the | 22 |
| lender's commitment requirements have been satisfied or | 23 |
| will be satisfied at the closing and a closing can be | 24 |
| scheduled; and
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| (2) the lender receives written notice from the title | 26 |
| company that the buyer's and seller's representatives have | 27 |
| confirmed their readiness to close at the appointed time.
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| (b) If the provisions of subsection (a) of this Section | 29 |
| have been met, the lender shall deliver the loan package to the | 30 |
| title company no later than 30 minutes prior to the scheduled | 31 |
| closing. The closing funds shall be in the escrowee's |
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| possession no later than the scheduled time of closing.
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| Section 35. Delay of closing; loss. | 3 |
| (a) If the lender has complied with the provisions of | 4 |
| Section 30 of this Act and the transaction does not close on | 5 |
| the scheduled closing date, the buyer shall pay the lender the | 6 |
| amount of the lender's loss incurred by reason of the delay in | 7 |
| closing.
If the transaction never closes, the buyer shall pay | 8 |
| the lender the additional charges incurred by the lender as a | 9 |
| result of the early funding requirement.
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| (b) A buyer who has been required to compensate a lender is | 11 |
| entitled to reimbursement of any amount paid to the lender for | 12 |
| its loss due to a delay or failure to close that is | 13 |
| attributable to the seller or any other party.
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| Section 40. Violations. A loan originator or loan broker or | 15 |
| an
investor who violates this Act are jointly and severally | 16 |
| liable to the
borrower for the greater of actual damages | 17 |
| incurred by the borrower on account
of the violation or | 18 |
| violations or $1,000 per occurrence, plus reasonable
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| attorney's fees.
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| Section 45. Exemption. This Act does not apply to an exempt | 21 |
| entity as
defined in the Residential Mortgage License Act of | 22 |
| 1987.
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| Section 50. Application. The provisions of this Act apply | 24 |
| to purchase money mortgages only.".
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