(a) No settlement agent shall disburse any funds from an escrow or settlement account in connection with a mortgage loan transaction identified in § 47-32-103(a), until:

Terms Used In Tennessee Code 47-32-105

  • Disbursement of loan funds: means the delivery of the loan funds by the mortgage lender to the settlement agent in one (1) or more of the following forms:
    (A) Cash. See Tennessee Code 47-32-102
  • Escrow: Money given to a third party to be held for payment until certain conditions are met.
  • Loan funds: means the gross or net proceeds of the loan to be disbursed by the lender, in one (1) of the forms identified in subdivision (3), at loan closing. See Tennessee Code 47-32-102
  • Rescission: The cancellation of budget authority previously provided by Congress. The Impoundment Control Act of 1974 specifies that the President may propose to Congress that funds be rescinded. If both Houses have not approved a rescission proposal (by passing legislation) within 45 days of continuous session, any funds being withheld must be made available for obligation.
  • Right of rescission: Right to cancel, within three business days, a contract that uses the home of a person as collateral, except in the case of a first mortgage loan. There is no fee to the borrower, who receives a full refund of all fees paid. The right of rescission is guaranteed by the Truth in Lending Act (TILA). Source: OCC
  • Settlement: means the time when the settlement agent has received the duly executed deed, loan funds, loan documents, and other documents and funds required to carry out the terms of the contract between the parties, and the settlement agent reasonably determines that prerecordation conditions of such contracts have been satisfied. See Tennessee Code 47-32-102
  • Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
  • Settlement agent: means the person, other than a mortgage lender, responsible for conducting the settlement and disbursement of the settlement proceeds, and includes any individual, corporation, partnership, or other entity conducting the settlement, collection and disbursement of loan proceeds. See Tennessee Code 47-32-102
(1) Disbursement of loan funds, designated for said mortgage loan, has been received by the settlement agent;
(2) Such additional funds necessary to be provided by the borrower or other third party to fully fund the transaction have been received. All additional funds required by this subdivision (a)(2) in excess of one thousand dollars ($1,000), shall be provided to the settlement agent in one (1) of the forms identified in § 47-32-102(3); and
(3) All documents required to complete the transaction have been executed and are deemed suitable for recording.
(b) In any transaction in which the borrower may exercise a right of rescission under the federal Truth-in-Lending Act, compiled in 15 U.S.C. § 1601 et seq., and the settlement agent has received loan funds prior to or on the first business day after the time the rescission right has expired, the settlement agent shall not disburse any settlement proceeds earlier than the first day after the expiration of the rescission period, and the settlement agent has determined that the borrower has not exercised the right of rescission.
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