Current through Reg. 49, No. 38; September 20, 2024
(a) Purpose. The purpose of this section is
to clarify and establish requirements related to the requirement of a person
who collects or receives a payment from a wrap borrower under the terms of a
wrap mortgage loan to hold such funds in trust, as provided by Finance Code
§ 159.151.
(b) Definitions.
The following terms in this section have the following meanings, unless the
context clearly indicates otherwise:
(1)
"Financial institution" has the meaning assigned by Finance Code §
RSA
201.101(1).
(2) "Trust account" means a custodial, trust,
or escrow account managed by one person for the benefit of another
person.
(3) "Trust funds" means the
funds collected or received from a wrap borrower under the terms of a wrap
mortgage loan.
(4) "Receiver" means
a wrap lender or other person collecting or receiving trust funds.
(c) Trust Account Required. Unless
otherwise agreed to in writing by the wrap borrower and wrap lender in
connection with the wrap mortgage loan, trust funds must be placed in a trust
account meeting the requirements of this section, and maintained or disbursed
in accordance with this section.
(d) Trust Account Requirements.
(1) The trust account must be clearly
identified as such at the financial institution.
(2) The receiver may, but is not required to,
maintain separate trust accounts for each wrap mortgage loan or wrap borrower.
To the extent the receiver maintains separate trust accounts for each wrap
mortgage loan or wrap borrower, the same trust account may also be used for
purposes of administering an escrow account for the wrap mortgage loan or wrap
borrower.
(3) Funds in the trust
account must be capable of being disbursed by the receiver on-demand or in an
amount of time sufficient to timely effect disbursements reasonably anticipated
from the trust account.
(4) A
receiver, in addition to depositing trust funds, may deposit and maintain a
limited amount of money in the trust account necessary to avoid or cover
potential fees imposed by the financial institution in connection with the
trust account including account maintenance fees or fees charged for
insufficient funds.
(e)
A receiver may not:
(1) commingle trust funds
with non-trust funds;
(2) deposit
or maintain trust funds in a personal account or any form of business account;
or
(3) pay operating expenses or
otherwise make withdrawals or disbursements from a trust account for any
purpose other than the proper disbursement of trust funds.
(f) Disbursement of Trust Funds.
(1) A receiver may only disburse money from a
trust account in accordance with the terms of the wrap mortgage loan or such
other agreement as may be entered into with the wrap borrower to govern the
disbursement of trust funds.
(2) If
a receiver is unable to reasonably determine to which party or parties trust
funds should be disbursed, the receiver may tender trust funds into the
registry of a court of competent jurisdiction and interplead the relevant party
or parties.
