H-4012              _______________________________________________

                                                   HOUSE BILL NO. 1369

                        _______________________________________________

State of Washington                              50th Legislature                              1988 Regular Session

By Representatives Winsley and Lux

Read first time 1/13/88 and referred to Committee on Financial Institutions & Insurance.

AN ACT Relating to escrow; adding new sections to chapter 18.44 RCW; and providing an effective date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1.     "Real property lender" as used in sections 1 through 5 of this act means a bank, savings bank, savings and loan association, credit union, mortgage company, or other corporation, association, or partnership that makes loans secured by real property located in this state.

NEW SECTION. Sec. 2.     No real property lender may advance the proceeds of any loan by means of a draft or check drawn upon any bank, savings bank, savings and loan association, or credit union located outside the state of Washington if the loan proceeds are to be placed in escrow.

NEW SECTION. Sec. 3.     No real property lender may charge interest on any loan until the loan proceeds are available for immediate disbursement.  For purposes of this section, loan proceeds are not available for immediate disbursement when placed in escrow by means of a draft or check until the draft or check is finally paid as provided in RCW 62A.4-213.

NEW SECTION. Sec. 4.     In the process of closing any escrow, no escrow agent may pay out money from any escrow until all money from any new loan and from any other sources have been collected.

NEW SECTION. Sec. 5.     (1) No real property lender may require as a condition to granting any loan that the borrower use the escrow services of the lender, a particular escrow agent, or the escrow services of any particular person or other real property lender.  The choice of escrow services shall be retained by the buyer and seller of real property.

          (2) The lender may object to the selection of escrow services by the buyer and seller if the lender has reasonable cause to believe that the buyer and seller have not selected a competent provider of escrow services.

NEW SECTION. Sec. 6.     Whenever it appears that any person is in violation of any of the provisions of sections 1 through 5 of this act, application may be made to the appropriate court for an order enjoining the person from engaging in or continuing to engage in activity violative of sections 1 through 5 of this act, and upon a showing that such person has engaged, or is about to engage, in any such activity, a permanent or temporary injunction, restraining order, or other appropriate order may be issued by the court.

NEW SECTION. Sec. 7.     The director may adopt all rules necessary to implement sections 1 through 6 of this act.

NEW SECTION. Sec. 8.     If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 9.     Sections 1 through 7 of this act are added to chapter 18.44 RCW.

NEW SECTION. Sec. 10.    This act shall take effect January 1, 1989.