AN ACT
RELATING TO REAL ESTATE; EXPANDING INVESTMENT POSSIBILITIES
FOR A CERTAIN CAPITAL FUND IN THE LAND TITLE TRUST FUND; PROVIDING CERTAIN
POWERS TO THE NEW MEXICO MORTGAGE FINANCE AUTHORITY; PROVIDING FOR A
SCHOLARSHIP PROGRAM.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 58-18-5 NMSA 1978 (being Laws 1975,
Chapter 303, Section 5, as amended) is amended to read:
"58‑18‑5. POWERS OF THE AUTHORITY.‑‑The
authority shall have all the powers necessary or convenient to carry out and
effectuate the purposes and provisions of the Mortgage Finance Authority Act,
including but without limiting the generality of the foregoing, the power:
A. to sue and be sued;
B. to have a seal and alter it at pleasure;
C. to make and alter bylaws for its organization
and internal management;
D. to appoint other officers, agents and
employees, prescribe their duties and qualifications and fix their
compensation;
E. to acquire, hold, improve, mortgage, lease
and dispose of real and personal property for its public purposes;
F. subject to the provisions of Section 58‑18‑6
NMSA 1978, to make loans, and contract to make loans, to mortgage lenders;
G. subject to the provisions of Section 58‑18‑7
NMSA 1978, to purchase, and contract to purchase, mortgage loans from mortgage
lenders;
H. to procure or require the procurement of a
policy of group or individual life insurance or disability insurance or both to
insure repayment of mortgage loans in event of the death or disability of the
borrower and to pay any premiums for the policy;
I. to procure insurance against any loss in
connection with its operations, including without limitation the repayment of
any mortgage loan, in amounts and from insurers, including the federal
government, that the authority deems necessary or desirable; to procure
liability insurance covering its members, officers and employees for acts
performed within the scope of their authority as members, officers or
employees; and to pay any premiums for insurance procured;
J. subject to any agreement with bondholders or
noteholders:
(1) to renegotiate any mortgage loan or any loan
to a mortgage lender in default;
(2) to waive any default or consent to the
modification of the terms of any mortgage loan or any loan to a mortgage lender
and otherwise exercise all powers with respect to its mortgage loans and loans
to mortgage lenders that any private creditor may exercise under applicable
law; and
(3) to commence, prosecute and enforce a judgment
in any action or proceeding, including without limitation a foreclosure
proceeding, to protect or enforce any right conferred upon it by law, mortgage
loan agreement, contract or other agreement; and in connection with any such
proceeding, to bid for and purchase the property or acquire or take possession
of it and, in such event, complete, administer, pay the principal of and
interest on any obligations incurred in connection with the property and
operate or dispose of and otherwise deal with the property in such manner as
the authority may deem advisable to protect its interests therein;
K. to make and execute contracts for the
administration, servicing or collection of any mortgage loan and pay the
reasonable value of services rendered to the authority pursuant to such
contracts;
L. to fix, revise from time to time, charge and
collect fees and other charges in connection with the making of mortgage loans,
the purchasing of mortgage loans and any other services rendered by the
authority;
M. subject to any agreement with bondholders or
noteholders, to sell any mortgage loans at public or private sale at such
prices and on such terms as the authority shall determine;
N. to borrow money and to issue bonds and notes
that may be negotiable and to provide for the rights of the holders thereof;
O. to arrange for guarantees or other security,
liquidity or credit enhancements in connection with its bonds, notes or other
obligations by the federal government or by any private insurer or other
provider and to pay any premiums therefor;
P. subject to any agreement with bondholders or
noteholders, to invest money of the authority not required for immediate use,
including proceeds from the sale of any bonds or notes:
(1) in obligations of any municipality or the
state or the United States of America;
(2) in obligations the principal and interest of
which are guaranteed by the state or the United States of America;
(3) in obligations of any corporation wholly
owned by the United States of America;
(4) in obligations of any corporation sponsored
by the United States of America that are or may become eligible as collateral
for advances to member banks as determined by the board of governors of the
federal reserve system;
(5) in certificates of deposit or time deposits
in banks qualified to do business in New Mexico, secured in the manner, if any,
as the authority shall determine;
(6) in contracts for the purchase and sale of
obligations of the types specified in this subsection; or
(7) as otherwise provided in any trust indenture
or a resolution authorizing the issuance of the bonds or notes;
Q. subject to any agreement with bondholders or
noteholders, to purchase bonds or notes of the authority at the price as may be
determined by the authority or to authorize third persons to purchase bonds or
notes of the authority; bonds or notes so purchased shall be canceled or
resold, as determined by the authority;
R. to make surveys and to monitor on a
continuing basis the adequacy of the supply of:
(1) funds available in the private banking system
in the state for affordable residential mortgages; and
(2) adequate, safe and sanitary housing available
to persons of low or moderate income in the state and various sections of the
state;
S. to make and execute agreements, contracts and
other instruments necessary or convenient in the exercise of the powers and
functions of the authority under the Mortgage Finance Authority Act;
T. to employ architects, engineers, attorneys
(other than and in addition to the attorney general of the state), accountants,
housing, construction and financial experts and such other advisors,
consultants and agents as may be necessary in its judgment and to fix and pay
their compensation;
U. to contract for and to accept any gifts or
grants or loans of funds or property or financial or other aid in any form from
the federal government or from any other source and to comply, subject to the
provisions of the Mortgage Finance Authority Act, with the terms and conditions
thereof;
V. to maintain an office at such place in the
state as it may determine;
W. subject to any agreement with bondholders and
noteholders, to make, alter or repeal, subject to prior approval by the
Mortgage Finance Authority Act oversight committee, hereby created, to be
composed of four members appointed by the president pro tempore of the senate
and four members appointed by the speaker of the house of representatives, such
rules and regulations with respect to its operations, properties and facilities
as are necessary to carry out its functions and duties in the administration of
the Mortgage Finance Authority Act;
X. to make, purchase, guarantee, service and
administer mortgage loans for residential housing for the purposes set forth in
the Mortgage Finance Authority Act where private banking channels and private
enterprise, unaided, have not, cannot or are unwilling to make, purchase,
guarantee, service or administer the loans;
Y. to act as trustee and administer the land
title trust fund created pursuant to Section 58-28-3 NMSA 1978;
Z. to act as trustee and administrator pursuant
to the Low-Income Housing Trust Act; and
AA. to do any and all things necessary or
convenient to carry out its purposes and exercise the powers given and granted
in the Mortgage Finance Authority Act."
Section 2. Section 58-18B-3 NMSA 1978 (being Laws 1994,
Chapter 146, Section 3, as amended) is amended to read:
"58-18B-3. DEFINITIONS.--As used in the Low-Income
Housing Trust Act:
A. "appropriate financial institution
service charges and fees" means those service charges and fees that a
financial institution charges its customers on demand deposit accounts;
B. "division" means the financial
institutions division of the regulation and licensing department;
C. "escrow closing agent" means an
escrow agent other than a title company that acts in the normal course of
business as the agent of the seller and buyer of real estate for the purpose of
consummating a sale, including the performance of the following functions:
(1) preparation of deeds, mortgages, promissory
notes, deeds of trust, real estate contracts, assignments or other documents
incidental to the sale as permitted by law;
(2) calculations and disbursements of prorated
taxes, insurance premiums, utility bills and other charges incidental to the
sale;
(3) preparation of sellers' and buyers' closing
statements;
(4) supervision of signing of documents;
(5) collection and disbursement of down payments,
realtors' commissions, fees and other charges pursuant to a sales agreement;
and
(6) recordation of documents;
D. "escrow servicing agent" means a
person who in the normal course of business collects and disburses funds
received from real estate-related financing instruments on behalf of a lender
or borrower;
E. "first-time home buyer" means:
(1) an individual or the individual's spouse who
has not owned a home other than a manufactured home during the three-year
period prior to the purchase of a home; or
(2) an individual who is a displaced homemaker or
a single parent;
F. "fund" means the land title trust
fund created pursuant to the provisions of the Land Title Trust Fund Act;
G. "low-income persons" means a
household consisting of a single individual or a family or unrelated
individuals living together when the household's total annual income does not
exceed eighty percent of the median income for the area, as determined by the
United States department of housing and urban development and as adjusted for
family size, or other income ceiling determined for the area on the basis of
that department's findings that such variations are necessary because of
prevailing levels of construction costs or fair market rents or unusually high
or low family incomes;
H. "person" means an individual or any
other legal entity;
I. "property manager" means a person
who acts in the normal course of business as the agent for the owner of real
property for the purpose of property rental, leasing and management; and
J. "trustee" means the New Mexico
mortgage finance authority."
Section 3. Section 58-18B-5 NMSA 1978 (being Laws 1994,
Chapter 146, Section 10, as amended) is amended to read:
"58-18B-5. TRUST ACCOUNTS--ESCROW ACCOUNTS--SPECIAL
ACCOUNTS--POOLED INTEREST-BEARING ACCOUNTS--DISPOSITION OF EARNED INTEREST ON
CERTAIN ACCOUNTS.--
A. Every real estate broker who maintains a
trust or escrow account as required pursuant to the provisions of Paragraph (8)
of Subsection A of Section 61-29-12 NMSA 1978 may maintain a pooled
interest-bearing escrow account and may deposit all customer funds into that
account except for:
(1) funds required to be deposited into a
property management trust account under an express property management
agreement; or
(2) funds required to be deposited into an
interest-bearing account under an express agreement between the parties to a
transaction and under which agreement provisions are made for the payment of
interest to be earned on the funds deposited.
B. Every escrow closing agent that maintains a
trust account or escrow account pursuant to the provisions of Section 58-22-20
NMSA 1978 shall maintain a pooled interest-bearing escrow account and shall
deposit all customer funds into that account, except for funds required to be
deposited into an interest-bearing account under an express agreement between
the parties to a transaction and under which agreement provisions are made for
the payment of interest to be earned on the funds deposited.
C. The interest earned on customer funds
deposited in a pooled interest-bearing escrow account pursuant to the
provisions of Subsection A or B of this section, net of any appropriate
financial institution service charges and fees, shall be remitted monthly or
quarterly from the financial institution in which the account is maintained to
the fund. The account agreement between
the depositor and the financial institution shall expressly provide for the
required remittance of interest.
D. The provisions of this section do not relieve
a real estate broker or escrow closing agent from any obligations under other
laws to safeguard and account for funds in a pooled interest-bearing account.
E. The pooled interest-bearing escrow accounts
authorized to be established pursuant to the provisions of this section shall
be interest-bearing demand accounts from which withdrawals and transfers can be
made without delay, subject only to any notice period the depository
institution is required to observe by law or rule.
F. The trustee shall adopt rules to carry out
the provisions of the Low-Income Housing Trust Act.
G. A person establishing and maintaining a
pooled interest-bearing escrow account required by the provisions of Subsection
A or B of this section is not required to make disclosure to a person whose
funds are placed in the account of the disposition of interest earned on the
account.
H. An escrow servicing agent shall not be
required to establish and maintain a pooled interest-bearing escrow account
pursuant to the provisions of Subsection A or B of this section.
I. A property manager shall not be required to
establish and maintain a pooled interest-bearing escrow account pursuant to the
provisions of Subsection A or B of this section.
J. Real estate brokers and escrow closing agents
shall enroll and instruct participating financial institutions on how to
establish a pooled interest-bearing escrow account and how to authorize
remittance of accrued interest less service charges to the fund.
K. A real estate broker or an escrow closing
agent shall not be required to establish and maintain a pooled interest-bearing
escrow account pursuant to the provisions of Subsection A or B of this section
if no financial institution in the community where the broker or agent
maintains his principal place of business provides or offers that type of
account."
Section 4. Section 58-28-4 NMSA 1978 (being Laws 1997,
Chapter 118, Section 4, as amended) is amended to read:
"58-28-4. TRUST ACCOUNTS--ESCROW ACCOUNTS--POOLED
INTEREST-BEARING TRANSACTION ACCOUNTS--DISPOSITION OF EARNED INTEREST ON
CERTAIN ACCOUNTS.--
A. A title company that maintains one or more
trust accounts or escrow accounts into which customer funds are deposited for
use in the purchase, sale or financing of real property located in New Mexico
may maintain one or more pooled interest-bearing transaction accounts and may
deposit customer funds into those accounts, except for funds required to be
deposited into interest-bearing accounts or investments under instructions from
one or more of the parties to a transaction that provide for the payment of
interest to be earned on the deposited funds to a person other than the title
company. A pooled interest-bearing
transaction account established pursuant to the provisions of this section
shall be maintained in the name of the title company, but the trustee shall be
named and shown as the beneficial owner of the account income or interest. A title company maintaining one or more
pooled interest-bearing transaction accounts shall not be paid or receive any
interest earned on funds deposited in the accounts except for the purpose of
remitting net earned interest to the trustee pursuant to the provisions of this
section.
B. The interest earned on customer funds
deposited in a pooled interest-bearing transaction account pursuant to the
requirements of Subsection A of this section, net of any service charges and
fees that a depository institution charges to regular, non-title company
depositors and net of any reasonable charge for preparation and transmittal of
any required report pursuant to the provisions of Subsection F of this section,
shall be remitted monthly or quarterly either directly to the fund or to the
title company for its remittance to the fund.
Alternatively, the depository institution may credit the title company
account with the net interest earned either monthly or quarterly. Interest accrued after deducting the
allowable charges and fees shall be treated as interest earned by the trustee
and reported as such by the depository institution.
C. The provisions of this section shall not
change existing duties or obligations of a title company under other laws to
safeguard and account for funds held for customers.
D. Funds in each pooled interest-bearing
transaction account shall be subject to withdrawal upon request and without
delay, subject only to the notice period the depository institution is required
to observe by law or rule.
E. The rate of interest payable on a pooled
interest-bearing transaction account shall not be less than the rate
customarily paid by the depository institution to regular, non-title company
depositors for similar accounts.
Interest shall be computed in accordance with the depository
institution's standard accounting practice.
Higher rates offered by the depository institution to customers whose
deposits exceed certain time or quantity minima, such as those offered in the
form of certificates of deposit, may be obtained by the title company on some
or all of the deposited funds so long as there is no impairment of the right to
withdraw or transfer principal, subject only to the notice period the
depository institution is required to observe by law or rule.
F. A depository institution or title company
making a remittance of interest to the fund shall at the time of the remittance
transmit a report to the trustee for each account from which remittance is made
showing:
(1) the name of the title company maintaining the
account from which remittance is made;
(2) the rate of interest used to compute the
earned interest and the amount of earned interest;
(3) the amount, if any, of depository institution
service charges and fees deducted and any charge for the preparation and
transmittal of the report; and
(4) the account balance as of the ending date of
the reporting period.
G. If the depository institution remits to the
title company or credits the title company account, it shall make the
remittance or credit no later than ten days after the statement cutoff for that
account. The title company shall remit
to the fund and shall send the report with the remittance no later than thirty
days after receipt of the remittance or credit by the depository institution.
H. Remittances to the fund shall be made at
least quarterly, no later than ten days after the statement cutoff for that
account if made by the depository institution and no later than thirty days
after receipt of remittance or credit from the depository institution if made
by the title company.
I. The trustee shall adopt and promulgate rules
regarding the obligations of depository institutions pursuant to the provisions
of the Land Title Trust Fund Act and the Low-Income Housing Trust Act."
Section 5. Section 58-28-5 NMSA 1978 (being Laws 1997,
Chapter 118, Section 5) is amended to read:
"58-28-5. USE OF MONEY--ELIGIBLE ACTIVITIES.--
A. Money from the fund and other sources may be
used to finance in whole or in part any loans or grant projects that will
provide housing for low-income persons and for other uses specified in this
section. Money deposited into the fund
may be used annually as follows:
(1) no more than five percent of the fund shall
be used for expenses of administering the fund;
(2) no less than twenty percent of the fund shall
be invested in a permanent capital fund, the interest on which may be used for
purposes specified in this section;
(3) no less than fifty percent of the fund shall
be allocated to eligible organizations to make housing more accessible to
low-income persons;
(4) no more than ten percent of the fund may be
alloted for use to provide scholarships for New Mexico high school graduates
and general equivalency diploma recipients at New Mexico public post-secondary
educational institutions under a program approved by the trustee under the
administration of a nonprofit statewide land title association; and
(5) the remaining balance may be allocated to
eligible organizations for other housing-related programs for the benefit of
the public as specifically approved by the trustee from time to time.
B. Money in the capital fund authorized in
Paragraph (2) of Subsection A of this section may be invested in fully
amortizing interest-bearing mortgages secured by real property in New Mexico,
the interest on which may be used for purposes specified in this section."