SENATE COMMERCE COMMITTEE

STATEMENT TO

SENATE, No. 928

with committee amendments

STATE OF NEW JERSEY

DATED: MAY 2, 1996

      The Senate Commerce Committee reports favorably and with committee amendments Senate Bill No. 928.

      This bill, as amended, requires lenders to disburse funds for the proceeds of a loan to the purchaser of real property, only by means of a certified, cashier's, teller's or bank check, or by arranging an electronic transfer of funds or by providing for payment by cash. The bill also requires title insurance producers and title insurance companies to maintain separate records of all receipts and disbursements for funds representing closing and settlement proceeds of a real estate transaction, to keep such funds in a separate trust or escrow account and not to commingle these funds with any other funds of the title insurance producer or company. The bill also prohibits a title insurance producer or company from disbursing funds representing closing or settlement proceeds of a real estate transaction unless those funds have been deposited in the trust or escrow account by certified, cashier's, teller's or bank check, an electronic funds transfer, cash, or other collected funds. Under the bill, a title insurance producer or company is not prohibited from disbursing against uncollected funds in an amount not to exceed $1,000.

      The committee amended the bill to include teller's checks in the provisions of the bill.