106.105 - Contributions; payment of obligations; notice regarding and disposition of excess money; civil penalty. - Nevada Statutes

106.105  Contributions; payment of obligations; notice regarding and disposition of excess money; civil penalty.

      1.  Except as otherwise provided in subsection 2, a lender who requires a borrower to make advance contributions to an impound trust account, or an account of similar name, for the payment of taxes, insurance premiums or other obligations related to the encumbered property shall:

      (a) Require contributions in an amount reasonably necessary to pay the obligations as they become due.

      (b) Unless money in the account is insufficient, pay in a timely manner the obligations as they become due.

      (c) Within 30 days after the completion of its annual review of the account, notify the borrower:

             (1) Of the amount by which the contributions exceed the amount reasonably necessary to pay the annual obligations due from the account; and

             (2) That the borrower may specify the disposition of the excess money within 20 days after receipt of the notice. If the borrower fails to specify such a disposition within that time, the lender shall maintain the excess money in the account.

Ê A lender who violates any provision of this subsection is liable to the borrower for a civil penalty of not more than $1,000.

      2.  A lender, to recover previous deficiencies in contributions to an impound trust account, may require contributions to the account in an amount greater than that reasonably necessary to pay the obligations as they become due. The borrower is otherwise entitled to the amount by which the borrower’s contributions to the account exceed the amount reasonably necessary to pay the annual obligations due from the account, together with interest thereon at the rate established pursuant to NRS 99.040.

      3.  As used in this section:

      (a) “Borrower” means a mortgagor, grantor of a deed of trust or other obligor on a loan secured by a lien upon real property.

      (b) “Lender” means a mortgagee, beneficiary of a deed of trust or other obligee on a loan secured by a lien upon real property, and his or her successor in interest.

      (Added to NRS by 1989, 1766)