§ 19-14.1-8 - Escrow accounts. - Rhode Island Statutes

SECTION 19-14.1-8

   § 19-14.1-8  Escrow accounts. – (a) All fees paid by clients or residential mortgage loan applicants to alender or loan broker prior to the closing of the loan in connection with whichthose fees are paid, shall be deposited in one or more escrow accountsmaintained at a federally-insured-deposit-taking institution. The account(s)shall contain only those funds collected from clients or residential mortgageloan applicants. Fees shall include, but are not limited to: application fees,appraisal fees, title attorney fees, title insurance fees, credit report fees,rate lock fees or other similar fees.

   (b) A lender or loan broker may offset related funds in theescrow account(s) against commissions to which it is entitled in accordancewith the contract for services actually performed or for reimbursement for thefees described in the immediately preceding paragraph paid directly by thelender or loan broker to third parties. All offsets shall be accounted forthrough written documentation evidencing the amount of offset.

   (c) The lender or loan broker shall maintain complete andaccurate records of all escrow accounts and shall produce upon request alldocuments pertaining to escrow account activity including, but not limited to:bank statements, check stubs, canceled, voided, or unused checks, deposittickets, and reconciliations or other comparable account records.

   (d) No licensee governed by this chapter shall comminglemoney collected for fees from clients or residential mortgage loan applicantswith its own funds or use any part of a client's or residential mortgage loanapplicant's money in the conduct of the lender's or loan broker's businessuntil those fees or moneys have been offset as provided for in this section.