08 LC 29
3491S
COMMITTEE
OF CONFERENCE SUBSTITUTE TO SB 355
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Article 1 of Chapter 14 of Title 44 of the Official Code of Georgia
Annotated, relating to general provisions concerning mortgages, conveyances to
secure debt, and liens, so as to provide for the disbursement of certain
settlement funds after closing even though such funds are not collected funds;
to provide that lenders shall provide loan funds in the form of collected funds
at or prior to closing; to provide for related matters; to provide for an
effective date and applicability; to repeal conflicting laws; and for other
purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Article
1 of Chapter 14 of Title 44 of the Official Code of Georgia Annotated, relating
to general provisions concerning mortgages, conveyances to secure debt, and
liens, is amended by revising subsections (c) and (d) of Code Section 44-14-13,
relating to disbursement of settlement proceeds, as follows:
"(c)
Except as otherwise provided in this Code section, a settlement agent shall not
cause a disbursement of settlement proceeds unless such settlement proceeds are
collected funds.
Notwithstanding
that a deposit made by a settlement agent to its escrow account does not
constitute collected funds, the
A
settlement agent may
cause a
disbursement of
disburse
settlement proceeds from
the
its
escrow account
in reliance
on such deposit under any of the following
circumstances
after receipt
of any of the following negotiable instruments even though the same are not
collected funds:
(1)
The deposit
is either (A) a certified check,
A
cashier´s
check, as
defined in subsection (g) of Code Section
11-3-104,
or
treasurer´s check issued by or drawn on, or (B) other similar primary
obligation of
from
a federally insured bank, savings bank, savings and loan association, or credit
union and
issued by a lender for a closing or loan
transaction, provided that such funds are
immediately available and cannot be dishonored or refused when negotiated or
presented for
payment or
of any holding company or wholly owned subsidiary of any of the
foregoing;
(2)
The deposit is either a check or draft issued by a lender approved by the United
States Department of Housing and Urban Development (HUD);
(3)
The deposit is a check issued by a lender qualified to do business in
Georgia;
(4)(2)
The deposit
is a
A
check drawn on the escrow account of an attorney licensed to practice law in the
State of Georgia or on the escrow account of a real estate broker licensed under
Chapter 40 of Title 43, if the settlement agent has reasonable and prudent
grounds to believe that the
deposit
check
will constitute collected funds in the settlement agent´s escrow account
within a reasonable period;
(5)(3)
The deposit
is a
A
check issued by the United States of America or any agency thereof or the State
of Georgia or any agency or political
subdivision,
as such term is defined in Code Section
50-15-1, of the State of Georgia;
or
(6)(4)
The deposit
is a personal
A
check or checks in an aggregate amount not exceeding $5,000.00 per loan
closing.
For
purposes of this Code section,
disbursement
of settlement proceeds shall only be made from the proceeds of any
of the instruments described in paragraphs
(1) through
(6)
(4)
of this subsection
if such
instruments are negotiable instruments
if they are
negotiable in accordance with the
provisions of Code Section 11-3-104.
(d)
The lender shall at or before the loan closing deliver loan funds to the
settlement agent
either
in the form of collected funds or in the form of a negotiable instrument
described in
any of
paragraphs (1) through (3) of subsection
(c) of this Code
section,
provided that the lender must cause such instrument to be honored upon
presentment for payment to the bank or other depository institution upon which
such instrument was
drawn;
provided, however, that in the case of refinancing, or any other loan where a
right of rescission applies, the lender shall, prior to the disbursement of the
settlement proceeds and no later than 11:00 A.M. eastern standard time or
eastern daylight time, whichever is applicable, of the next business day
following the expiration of the rescission period required under the federal
Truth in Lending Act (15 U.S.C. Section 1601, et seq.), deliver loan funds to
the settlement agent in one or more of the forms set forth in this Code
section."
SECTION
2.
This
Act shall become effective on July 1, 2008, and shall apply to all loans closed
on or after July 1, 2008.
SECTION
3.
All
laws and parts of laws in conflict with this Act are repealed.