0001| AN ACT
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0002| RELATING TO HOUSING; ENACTING THE LAND TITLE TRUST FUND ACT;
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0003| CREATING A FUND AS A SOURCE FOR LOANS AND GRANTS TO MAKE HOUSING
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0004| MORE ACCESSIBLE FOR LOW-INCOME PERSONS; PROVIDING FOR INTEREST
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0005| EARNED ON CERTAIN LAND TITLE INDUSTRY ACCOUNTS TO BE PAID INTO THE
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0006| FUND; CREATING AN ADVISORY COMMITTEE; AMENDING A SECTION OF THE
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0007| NMSA 1978; MAKING AN APPROPRIATION; DECLARING AN EMERGENCY.
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0008|
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0009| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0010| Section 1. SHORT TITLE.--Sections 1 through 8 of this act may be cited as the "Land
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0011| Title Trust Fund Act".
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0012| Section 2. DEFINITIONS.--As used in the Land Title Trust Fund Act:
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0013| A. "committee" means the land title trust fund advisory committee;
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0014| B. "depository institution" means any bank, savings and loan association or credit
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0015| union authorized by federal or state law to do business in New Mexico and insured by the federal
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0016| deposit insurance corporation or the national credit union administration;
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0017| C. "division" means the financial institutions division of the regulation and
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0018| licensing department;
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0019| D. "eligible organization" means a nonprofit corporation whose primary purpose
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0020| is to provide affordable housing and that is qualified for tax exemption under Section 501(c)(3)
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0021| of the Internal Revenue Code of 1986, as amended; a unit of state or local government dealing
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0022| with housing; a local or regional housing authority or a tribal agency dealing with housing;
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0023| E. "fund" means the land title trust fund;
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0024| F. "low-income persons" means a household consisting of a single individual, a
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0025| family or unrelated individuals living together if the household's total annual income does not
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0001| exceed eighty percent of the median income for the area, as determined by the United States
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0002| department of housing and urban development, and as adjusted for family size or other income
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0003| ceiling determined for the area on the basis of that department's findings that such variations are
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0004| necessary because of prevailing levels of construction costs or fair market rents or unusually high
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0005| or low family incomes;
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0006| G. "pooled interest-bearing transaction account" means a trust or escrow account
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0007| made available by a depository institution in the form of a negotiable order of withdrawal
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0008| account, sweep account or other interest-bearing account;
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0009| H. "title company" means a title insurer or title insurance agent as defined in and
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0010| regulated pursuant to the New Mexico Title Insurance Law; and
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0011| I. "trustee" means the New Mexico mortgage finance authority.
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0012| Section 3. LAND TITLE TRUST FUND CREATED.--The "land title trust fund" is
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0013| created. The New Mexico mortgage finance authority shall be the trustee for the fund.
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0014| Section 4. TRUST ACCOUNTS--ESCROW ACCOUNTS--POOLED INTEREST-
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0015| BEARING TRANSACTION ACCOUNTS--DISPOSITION OF EARNED INTEREST ON
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0016| CERTAIN ACCOUNTS.--
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0017| A. A title company that maintains one or more trust accounts or escrow accounts
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0018| into which customer funds are deposited for use in the purchase, sale or financing of real
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0019| property located in New Mexico may maintain one or more pooled interest-bearing transaction
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0020| accounts and may deposit customer funds into those accounts, except for funds required to be
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0021| deposited into interest-bearing accounts or investments under instructions from one or more of
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0022| the parties to a transaction that provide for the payment of interest to be earned on the deposited
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0023| funds to a person other than the title company. A pooled interest-bearing transaction account
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0024| established pursuant to the provisions of this section shall be maintained in the name of the title
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0025| company, but the trustee shall be named and shown as the beneficial owner of the account
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0001| income or interest. A title company maintaining one or more pooled interest-bearing transaction
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0002| accounts shall not be paid or receive any interest earned on funds deposited in the accounts
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0003| except for the purpose of remitting net earned interest to the trustee pursuant to the provisions of
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0004| this section.
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0005| B. The interest earned on customer funds deposited in a pooled interest-bearing
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0006| transaction account pursuant to the requirements of Subsection A of this section, net of any
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0007| service charges and fees that a depository institution charges to regular, non-title company
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0008| depositors and net of any reasonable charge for preparation and transmittal of any required report
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0009| pursuant to the provisions of Subsection F of this section, shall be remitted monthly or quarterly
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0010| either directly to the fund or to the title company for its remittance to the fund. Alternatively, the
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0011| depository institution may credit the title company account with the net interest earned either
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0012| monthly or quarterly. Interest accrued after deducting the allowable charges and fees shall be
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0013| treated as interest earned by the trustee and reported as such by the depository institution.
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0014| C. The provisions of this section shall not change existing duties or obligations of
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0015| a title company under other laws to safeguard and account for funds held for customers.
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0016| D. Funds in each pooled interest-bearing transaction account shall be subject to
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0017| withdrawal upon request and without delay, subject only to the notice period the depository
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0018| institution is required to observe by law or regulation.
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0019| E. The rate of interest payable on a pooled interest-bearing transaction account
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0020| shall not be less than the rate customarily paid by the depository institution to regular, non-title
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0021| company depositors for similar accounts. Interest shall be computed in accordance with the
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0022| depository institution's standard accounting practice. Higher rates offered by the depository
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0023| institution to customers whose deposits exceed certain time or quantity minima, such as those
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0024| offered in the form of certificates of deposit, may be obtained by the title company on some or all
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0025| of the deposited funds so long as there is no impairment of the right to withdraw or transfer
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0001| principal, subject only to the notice period the depository institution is required to observe by law
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0002| or regulation.
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0003| F. A depository institution or title company making a remittance of interest to the
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0004| fund shall at the time of the remittance transmit a report to the trustee for each account from
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0005| which remittance is made showing:
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0006| (1) the name of the title company maintaining the account from which
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0007| remittance is made;
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0008| (2) the rate of interest used to compute the earned interest and the amount
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0009| of earned interest;
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0010| (3) the amount, if any, of depository institution service charges and fees
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0011| deducted and any charge for the preparation and transmittal of the report; and
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0012| (4) the account balance as of the ending date of the reporting period.
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0013| G. If the depository institution remits to the title company or credits the title
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0014| company account, it shall make the remittance or credit no later than ten days after the statement
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0015| cutoff for that account. The title company shall remit to the fund and shall send the report with
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0016| the remittance no later than thirty days after receipt of the remittance or credit by the depository
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0017| institution.
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0018| H. Remittances to the fund shall be made at least quarterly, no later than ten days
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0019| after the statement cutoff for that account if made by the depository institution and no later than
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0020| thirty days after receipt of remittance or credit from the depository institution if made by the title
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0021| company.
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0022| I. The division shall adopt and promulgate rules and regulations regarding the
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0023| obligations of depository institutions pursuant to the provisions of the Land Title Trust Fund Act.
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0024| Section 5. USE OF MONEY--ELIGIBLE ACTIVITIES.--Money from the fund and other
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0025| sources may be used to finance in whole or in part any loans or grant projects that will provide
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0001| housing for low-income persons and for other uses specified in this section. Money deposited
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0002| into the fund may be used annually as follows:
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0003| A. no more than seven percent of the fund shall be used for expenses of
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0004| administering the fund;
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0005| B. no less than twenty percent of the fund shall be invested in a permanent capital
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0006| fund, the interest on which may be used for purposes specified in this section;
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0007| C. no less than fifty percent of the fund shall be allocated to eligible organizations
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0008| to make housing more accessible to low-income persons; and
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0009| D. the remaining balance may be allocated to eligible organizations for other
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0010| housing-related programs for the benefit of the public as specifically approved by the trustee
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0011| from time to time.
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0012| Section 6. CONFLICT WITH FEDERAL REQUIREMENTS.--If any part of the Land
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0013| Title Trust Fund Act is found to be in conflict with federal requirements that are a prescribed
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0014| condition to the allocation of federal funds to the state, the conflicting part of that act is
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0015| inoperative solely to the extent of the conflict and with respect to the agencies directly affected,
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0016| and this finding does not affect the operation of the remainder of that act in its application to the
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0017| agencies concerned. The rules adopted pursuant to the provisions of the Land Title Trust Fund
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0018| Act shall meet those federal requirements that are a necessary condition to the receipt of federal
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0019| funds by the state.
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0020| Section 7. MATCHING FUNDS.--Money from the fund may be used to match federal,
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0021| local or private money to be used for projects authorized under the Land Title Trust Fund Act.
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0022| Section 8. LAND TITLE TRUST FUND ADVISORY COMMITTEE CREATED--
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0023| FUNCTIONS.--
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0024| A. The "land title trust fund advisory committee" is created. The committee shall
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0025| consist of seven persons:
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0001| (1) the chairman of the trustee or his designee, who shall serve as
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0002| chairman of the committee;
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0003| (2) two representatives of the land title industry appointed by the
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0004| governor;
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0005| (3) one representative of the banking industry and one representative of
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0006| the real estate industry appointed by the president pro tempore of the senate; and
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0007| (4) one representative of the mortgage lending industry and one
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0008| representative of the real estate industry appointed by the speaker of the house of representatives.
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0009| B. Of the first committee members appointed, two shall be appointed for terms of
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0010| five years, two shall be appointed for terms of four years and two shall be appointed for terms of
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0011| three years. Thereafter, appointed members shall be appointed for terms of five years. Members
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0012| shall serve at the pleasure of their respective appointing authorities, and vacancies shall be filled
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0013| by the appropriate appointing authority. Any member of the committee shall be eligible for
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0014| reappointment.
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0015| C. The committee shall be advisory to the trustee and shall be subject to oversight
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0016| by the Mortgage Finance Authority Act oversight committee.
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0017| D. The committee shall review all project applications and make
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0018| recommendations to the trustee for funding them. The committee shall not be involved in or
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0019| advisory to the trustee in matters relating to the investment of the fund.
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0020| E. The committee shall adopt and promulgate rules and regulations regarding:
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0021| (1) the time, place and procedures of committee meetings;
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0022| (2) the procedures for the review of and standards for recommending
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0023| applications for loans or grant projects; and
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0024| (3) the obligations of title companies pursuant to the provisions of the
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0025| Land Title Trust Fund Act.
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0001| Section 9. Section 58-18B-3 NMSA 1978 (being Laws 1994, Chapter 146, Section 3) is
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0002| amended to read:
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0003| "58-18B-3. DEFINITIONS.--As used in the Low-Income Housing Trust Act:
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0004| A. "appropriate financial institution service charges and fees" means those service
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0005| charges and fees that a financial institution charges its customers on demand deposit accounts;
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0006| B. "division" means the financial institutions division of the regulation and
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0007| licensing department;
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0008| C. "escrow closing agent" means an escrow agent other than a title company that
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0009| acts in the normal course of business as the agent of the seller and buyer of real estate for the
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0010| purpose of consummating a sale, including but not limited to the performance of the following
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0011| functions:
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0012| (1) preparation of deeds, mortgages, promissory notes, deeds of trust, real
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0013| estate contracts, assignments or other documents incidental to the sale as permitted by law;
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0014| (2) calculations and disbursements of prorated taxes, insurance premiums,
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0015| utility bills and other charges incidental to the sale;
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0016| (3) preparation of sellers' and buyers' closing statements;
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0017| (4) supervision of signing of documents;
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0018| (5) collection and disbursement of down payments, realtors' commissions,
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0019| fees and other charges pursuant to a sales agreement; and
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0020| (6) recordation of documents;
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0021| D. "escrow servicing agent" means any person who in the normal course of
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0022| business collects and disburses funds received from real estate-related financing instruments on
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0023| behalf of a lender or borrower;
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0024| E. "first-time home buyer" means:
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0025| (1) an individual or the individual's spouse who has not owned a home
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0001| other than a manufactured home during the three-year period prior to the purchase of a home; or
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0002| (2) any individual who is a displaced homemaker or a single parent;
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0003| F. "fund" means the low-income housing trust fund created pursuant to the
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0004| provisions of the Low-Income Housing Trust Act;
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0005| G. "low-income persons" means a household consisting of a single individual or a
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0006| family or unrelated individuals living together when the household's total annual income does not
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0007| exceed eighty percent of the median income for the area, as determined by the United States
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0008| department of housing and urban development and as adjusted for family size, or other income
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0009| ceiling determined for the area on the basis of that department's findings that such variations are
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0010| necessary because of prevailing levels of construction costs or fair market rents or unusually high
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0011| or low family incomes;
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0012| H. "person" means an individual or any other legal entity; and
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0013| I. "property manager" means a person who acts in the normal course of business
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0014| as the agent for the owner of real property for the purpose of property rental, leasing and
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0015| management."
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0016| Section 11. EMERGENCY.--It is necessary for the public peace, health and safety
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0017| that this act take effect immediately.
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