S.P. 45 - L.D. 116
An Act to Protect Consumers in Real Estate Mortgage Transactions
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 33 MRSA c. 9, sub-c. I-A is enacted to read:
SUBCHAPTER I-A
FUNDED SETTLEMENT ACT
This subchapter may be known and cited as the "Funded Settlement Act".
As used in this subchapter, unless the context otherwise indicates, the following terms have the following meanings.
1. Disbursement of loan funds. "Disbursement of loan funds" means the delivery of the loan funds by the lender to the settlement agent in one or more of the following forms:
A. Cash;
B. Wired funds or electronic transfer;
C. Certified check;
D. Checks issued by a governmental entity or instrumentality;
E. Cashier's check, teller's check or any transfer of funds by check or otherwise that is finally collected and unconditionally available to the settlement agent;
F. Checks or other drafts drawn by a state-chartered or federally chartered financial institution;
G. Checks or other drafts drawn by a state-chartered or federally chartered credit union; or
H. Checks issued by an insurance company licensed and regulated by the Bureau of Insurance.
2. Disbursement of settlement proceeds. "Disbursement of settlement proceeds" means the payment or sending of all proceeds of the transaction to the person or account designated to receive the proceeds.
3. Lender. "Lender" means a person regularly engaged in making loans secured by mortgages on real estate and to whom the debt is initially payable on the face of the loan documents. A person is regularly engaged in making such loans if the person made 5 or more loans subject to this subchapter in the preceding calendar year or has made 5 or more such loans in the then current calendar year.
4. Loan closing. "Loan closing" means that time agreed upon by the borrower and lender when the execution of the loan documents by the borrower and the receipt of those executed documents by the lender or settlement agent occur.
5. Loan documents. "Loan documents" means the note evidencing the debt due the lender, the mortgage securing the debt due to the lender and any other documents required by the lender to be executed by the borrower as a part of the transaction and includes any documents that may reasonably be required by the lender as a condition to disbursement of the settlement proceeds.
6. Loan funds. "Loan funds" means the proceeds of the loan to be disbursed by the lender to others at loan closing.
7. Settlement. "Settlement" means the time when the settlement agent has received the loan funds, loan documents and other documents and funds to carry out the terms of the contract between the parties and the settlement agent reasonably determines that all conditions for disbursement of the settlement proceeds as required by applicable law or such contracts have been satisfied. "Parties" as used in this subsection means the seller, purchaser, borrower, lender and the settlement agent.
8. Settlement agent. "Settlement agent" means the person responsible for conducting the settlement and disbursement of the settlement proceeds and includes an individual, corporation, partnership or other entity conducting the settlement and disbursement of loan proceeds. The lender may be the settlement agent.
This subchapter applies to transactions:
1. Purposes. That are incurred primarily for personal, family or household purposes;
2. Not open-end credit. That are not open-end credit as that term is defined in Title 9-A, section 1-301, subsection 26;
3. Not involving multiple advances. That do not contemplate multiple advances of funds as set forth in or required by the terms of the loan documents;
4. Location of lender or closing. When the lending office or branch from which the loan is made is located in this State or the loan closing occurs within this State; and
5. Secured by mortgages. That are secured by mortgages on real estate containing not more than 4 residential dwelling units.
The lender shall cause, at or before loan closing, disbursement of loan funds to the settlement agent; however, in the case of any loan when a right of rescission applies and has not been exercised, the lender shall cause disbursement of loan funds to the settlement agent prior to noon of the first business day after the expiration of the rescission period required under the federal Truth-in-Lending Act, 15 United States Code, Section 1601, et seq. and the state truth-in-lending provisions, Title 9-A, article VIII, as applicable.
§525. Duty of settlement agent
The settlement agent shall cause recordation of any deed, mortgage or other documents required to be recorded and shall cause disbursement of settlement proceeds within 2 business days of settlement or, when any right of rescission applies pursuant to the federal Truth-in-Lending Act, 15 United States Code, Section 1601 et seq. or the state truth-in-lending provisions, Title 9-A, article VIII, as applicable, at the time that the settlement agent reasonably determines that such right of rescission has not been exercised.
1. Consumer remedies. A lender or settlement agent who violates any provision of this subchapter and causes actual damage to a consumer is subject to a civil action by the aggrieved consumer in which the consumer has the right to recover the greater of actual damages in an amount determined by the court or, except as provided in subsection 2, an amount determined by the court not less than $250 nor more than $1,000, plus costs of the action together with reasonable attorney's fees.
2. Bona fide error. Liability under subsection 1 is limited to actual damages, plus costs of the action together with reasonable attorney's fees, if the lender or settlement agent shows by a preponderance of the evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adopted to avoid any such error.
3. Limitation of actions. An action may not be brought pursuant to this subchapter more than 2 years after the violation occurred.
With respect to lenders that are supervised financial organizations as that term is defined in Title 9-A, section 1-301, subsection 38-A, a violation of this subchapter is deemed an anticompetitive and deceptive practice and the Superintendent of Banking may take appropriate action to ensure compliance with this subchapter. With respect to all other supervised lenders, as that term is defined in Title 9-A, section 1-301, subsection 39, the Director of Consumer Credit Regulation may take such action.
Effective September 18, 1999, unless otherwise indicated.
| Revisor of Statutes Homepage | Subject Index | Search | Laws of Maine | Maine Legislature |
