SB 923

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AN ACT

RELATING TO REAL ESTATE; REVISING DEADLINES FOR THE FUNDING

OF REAL ESTATE TRANSACTIONS; AMENDING AND REPEALING SECTIONS

OF THE MORTGAGE LOAN COMPANY AND LOAN BROKER ACT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. Section 58-21-2 NMSA 1978 (being Laws 1983,

Chapter 86, Section 2, as amended) is amended to read:

"58-21-2. DEFINITIONS.--As used in the Mortgage Loan

Company and Loan Broker Act:

A. "affiliate" means a person who, directly or

indirectly, through one or more intermediaries, controls or

is controlled by or is under common control with another

person;

B. "closing agent" means a person, including a

title insurance agent or title insurance company, that acts

in the normal course of business in a fiduciary capacity as a

disinterested third party for the seller and buyer of real

property for the purpose of consummating a sale of real

property, 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;

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(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, commissions of real estate licensees, fees and

other charges pursuant to a sales agreement; and

(6) recordation of documents;

C. "division" means the financial institutions

division of the regulation and licensing department;

D. "director" means the director of the financial

institutions division of the regulation and licensing

department;

E. "dwelling" means a residential structure,

including a home, individual condominium unit, manufactured

home or modular home, that contains one to four units and is

permanently attached to real property;

F. "lender" means a person or government agency

making a mortgage loan;

G. "loan broker" means any person who acts as a

finder or agent of a lender or borrower of money for the

purpose of procuring a mortgage loan, or both;

H. "mortgage loan" means a loan secured by a

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dwelling permanently affixed to real property;

I. "mortgage loan company" means a person who,

directly or indirectly:

(1) holds himself out as being able to serve

as an agent for any person in an attempt to obtain a mortgage

loan;

(2) holds himself out as being able to serve

as an agent for a person who makes mortgage loans; or

(3) holds himself out as being able to make

mortgage loans; and

J. "net loan funds" means the mortgage loan

amounts specified in the note and mortgage less

lender-retained fees, as specified in the lender's

instruction to the closing agent."

Section 2. Section 58-21-23.2 NMSA 1978 (being Laws

2005, Chapter 191, Section 3) is amended to read:

"58-21-23.2. FUNDING OF REAL ESTATE TRANSACTIONS--

ENFORCEMENT.--

A. Unless the net loan funds necessary to complete

a purchase of real property have been previously delivered to

the seller or to the closing agent, a lender shall deliver

the required net loan funds within two business days of the

time that the lender deems the closing agent has fulfilled

the requirements of the closing agent's duties, except for

the recordation of documents, and shall:

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(1) authorize the closing agent to record

with the county clerk all documents necessary to complete the

real estate transaction and release the proceeds of the real

estate transaction in accordance with agreed upon escrow

instructions;

(2) advise the closing agent of any funding

conditions, as set forth in the lender's escrow instructions,

that have not been satisfied and instruct the closing agent

in writing what is to be done with any of the lender's funds

held in escrow; or

(3) advise the closing agent that the

documentation for the real estate transaction does not

satisfy the lender's escrow instructions, specify the manner

in which that documentation does not satisfy those

instructions and instruct the closing agent in writing what

is to be done with any of the lender's funds held in escrow.

B. In the event a lender does not comply with the

requirements of Subsection A of this section, unreasonably

refuses to approve the documentation necessary to complete a

real estate action or unreasonably delays authorization of

the recordation of closing documents and release of proceeds

of a real estate transaction, the director of the division

may, upon receipt of a complaint and in accordance with the

procedures set forth in the Mortgage Loan Company and Loan

Broker Act, suspend or revoke any state registration or

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license issued to the lender for a period not to exceed one

year."

Section 3. REPEAL.--Section 58-21-23.1 NMSA 1978 (being

Laws 2005, Chapter 191, Section 2) is repealed.

Section 4. EFFECTIVE DATE.--The effective date of the

provisions of this act is July 1, 2007.