[1] NOTE:  As provided in LFC policy, this report is intended only for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

 

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F I S C A L   I M P A C T   R E P O R T

 

 

 

SPONSOR:

Boitano

 

DATE TYPED:

2/1/02

 

HB

 

 

SHORT TITLE:

Available Funds Required at Closing

 

SB

364

 

 

ANALYST:

J. Sandoval

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY02

FY03

FY02

FY03

 

 

 

NFI

 

 

 

 

 

 

 

 

 

 

(Parenthesis ( ) Indicate Expenditure Decreases)

 

SOURCES OF INFORMATION

 

Responses Received From

Financial Institutions Division of Regulation and Licensing Department

Attorney General

 

No Response

Department of Finance and Administration

 

SUMMARY

 

Senate Bill 364 enacts a statute that requires financial institutions to provide available funds to a third-party fiduciary at the time of closing a sale or purchase of real property.   Available funds are funds subject to immediate withdrawal.

 

ADMINISTRATIVE IMPLICATIONS

 

The Financial Institutions Division of Regulation and Licensing contends there is a possibility of “increased complaints due to errors in the closing/funding process and… delays in closing/fundings…”

 

OTHER SUBSTANTIVE ISSUES

 

The Financial Institutions Division of Regulation and Licensing contends “lenders in New Mexico may experience difficulties with mortgage loan closing/fundings.  Borrowers/lenders may have to employ legal counsel to ensure accuracy and consumer/lender protection.

 

 

POSSIBLE QUESTIONS

 

  1. What does passage of this bill mean for financial institutions?
  2. What does passage of this bill mean for clients and potential clients of these financial institutions?
  3. Is there currently abuse of the fact that there is no statutory limitation in New Mexico on how long a lender may take to deliver funds following a closing?
  4. Is making funds available at the time of closing realistic?

 

JFS/njw

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