Montana Code 32-9-145. Escrow fund
32-9-145. Escrow fund. (1) An escrow fund authorized for any purpose by a mortgage loan contract is subject to applicable state and federal requirements. Money received from a borrower by a mortgage lender or mortgage servicer licensed under this part must be considered as held in trust immediately upon receipt. The mortgage lender or mortgage servicer shall place escrow funds in a depository institution prior to the end of the third business day following their receipt.
Terms Used In Montana Code 32-9-145
- Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
- Borrower: means a person seeking a residential mortgage loan or an obligor on a residential mortgage loan. See Montana Code 32-9-103
- Contract: A legal written agreement that becomes binding when signed.
- Depository institution: has the meaning provided in section 3 of the Federal Deposit Insurance Act, 12 U. See Montana Code 32-9-103
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- Escrow funds: means funds entrusted to a mortgage lender or mortgage servicer by a borrower for payment of taxes, insurance, or other payments to be made in connection with the servicing of a loan. See Montana Code 32-9-103
- Garnishment: Generally, garnishment is a court proceeding in which a creditor asks a court to order a third party who owes money to the debtor or otherwise holds assets belonging to the debtor to turn over to the creditor any of the debtor
- Licensee: means a person authorized pursuant to this part to engage in activities regulated by this part. See Montana Code 32-9-103
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgage: means a consensual interest in real property located in Montana, including improvements, securing a debt evidenced by a mortgage, trust indenture, deed of trust, or other lien on real property. See Montana Code 32-9-103
- Mortgage lender: means an entity that closes a residential mortgage loan, advances funds, offers to advance funds, commits to advancing funds for a mortgage loan applicant, or holds itself out as being able to perform any of those functions. See Montana Code 32-9-103
- Mortgage loan: A loan made by a lender to a borrower for the financing of real property. Source: OCC
- Mortgage servicer: means an entity that:
(a)for forward mortgages:
(i)engages, for compensation or gain from another or on its own behalf, in the business of receiving any scheduled periodic payment from a borrower pursuant to the terms of a residential mortgage loan, residential mortgage servicing documents, or a residential mortgage servicing contract;
(ii)meets the definition of servicer in 12 U. See Montana Code 32-9-103
- State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See Montana Code 1-1-201
(2)An escrow fund account must be a separate account established to hold only borrowers’ funds. The account must be designated and maintained for the benefit of borrowers. Escrow funds may not be commingled with any other funds.
(3)Escrow funds must be kept in the segregated account until disbursement. Money maintained in an escrow fund account is exempt from execution, attachment, or garnishment.
(4)A licensee may not encumber the corpus of an escrow fund account or commingle other operating funds with account funds.
(5)An escrow fund account may be used only for:
(a)a payment authorized by the borrower or the mortgage loan contract or required by federal or state law;
(b)a refund to the borrower;
(c)transfer to a depository institution;
(d)transfer to the appropriate mortgage lender or mortgage servicer in the case of a transfer of servicing;
(e)a purpose authorized by the mortgage loan contract; or
(f)purposes of complying with an order issued by the commissioner or a court.
(6)Accounting for escrow funds must be performed in compliance with the aggregate accounting rules established in regulation X, 24 C.F.R. § part 3500, and in compliance with 71-1-115. (See part compiler’s comment regarding contingent suspension.)