| (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 §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.
|
