STATEMENT TO

[Third Reprint]

SENATE, No. 928

with Assembly Floor Amendments

(Proposed By Assemblyman AUGUSTINE)

ADOPTED: MARCH 13, 1997

      These amendments provide: that if a closing agent is used for the purpose of closing and settling a mortgage transaction, mortgage bankers and brokers are required to make disbursements of loan proceeds by the use of good funds; that the agent, upon receipt of those funds, is to deposit the loan proceeds in a trust or escrow account, which shall not be commingled with the agent's own funds, and shall disburse the loan proceeds upon the closing or settlement in accordance with the settlement documents; that a mortgage banker or mortgage broker is not required to utilize a closing agent; and that a mortgage banker or broker may directly disburse loan proceeds from the account of the mortgage banker to the mortgagor and other persons entitled to receive disbursements from the settlement when a closing agent is not used.