OAR 441-875-0040: Financial Practices; Manner of Disbursement

(1) In addition to those books and records required under ORS 86A.095 through 86A.198 and OAR 441-865-0010 through 441-865-0090, a mortgage banker or mortgage broker shall maintain books and records for each trust account in accordance with this rule: (a) Mortgage bankers and mortgage brokers must reconcile at least monthly all trust accounts: (A) The reconciled bank balance of the trust account must equal the sum of the balances in the individual owner's ledger accounts and also must equal the balance shown in the check register or the journal of receipts and disbursements for the trust account; (B) The mortgage banker or mortgage broker must sign and date the reconciliation upon its completion. (b) Each mortgage banker or mortgage broker shall set up and maintain a subsidiary ledger for each trust account showing the receipts and disbursements and maintaining a running total of every transaction pertaining to the trust account. (2) The mortgage banker’s or mortgage broker’s offices, places of business, books, records, accounts, files and papers relating to the trust account shall be available for examination by the director under OAR 441-865-0010 through 441-865-0090. (3) If funds are placed in a neutral escrow depository pursuant to the written agreement required by ORS 86A.157(1), the agreement shall provide authorization for the director to examine the offices, places of business, books, records, accounts, files and papers relating to the client funds. (4) Funds disbursed from a trust account shall be in a form that allows withdrawal from the account including by check or any electronic transmission of funds or wire transfer, automated clearinghouse authorizations, debit transactions or online payments through a website. (5) All withdrawals must be documented by: (a) Checks which are prenumbered and bear the words "Client Trust Account" upon the face of the check. A mortgage banker or mortgage broker shall account for all checks, including voided checks, as part of the books and records maintained by the mortgage banker or mortgage broker. (b) A record of the withdrawal including a traceable identifying name or number supplied by a federally insured financial institution or transferring entity for electronic transmissions of funds or wire transfers, automated clearinghouse authorizations, debit transactions, or online payments through a website. (c) Compliance with subsection 4 of this rule may be satisfied if a mortgage banker or mortgage broker has or can produce an image of the check as well as evidence that it has been negotiated or has retained a receipt for the withdrawal of funds containing the traceable identifying name or number supplied by the federally insured financial institution or transferring entity for electronic transmission of funds or wire transfers, automated clearinghouse authorizations, debit transactions, online payments through a website along with written documentation that identifies the name of the client, amount of the withdrawal, and the purpose of the funds for each client whose funds are included in the deposit. (d) In no case may a mortgage broker or mortgage banker withdraw client trust funds in the form of cash. (6) In the case of residential loan applications, escrow instructions and instructions for trust fund disbursement of fees shall provide that no trust funds may be disbursed to the mortgage banker or mortgage broker until the mortgage banker or mortgage broker has provided the following minimum services and disclosures: (a) A good faith estimate required by Regulation X, 12 C.F.R. Part 1024; (b) A completed loan application; (c) If prepared, a fee agreement; (d) HUD guide(s) for home buyers; (e) The adjustable rate mortgage booklet as prepared by the Federal Reserve Board, if applicable; (f) Truth in Lending Act disclosures as required by 12 C.F.R. Part 1026. (g) Notice that homeowners with reverse mortgages are not eligible to defer collection of homestead property taxes as allowed under ORS 311.666 through 311.701. (7) In the event that the mortgage banker or mortgage broker accepts fees in advance of completing professional services, or accepts fees paid as a retainer to secure the availability of the mortgage banker or mortgage broker, or accepts a consulting fee for professional services, and such fees are subject to refund under the provisions of these rules, such amounts may be withdrawn from the trust account for the benefit of the mortgage banker or mortgage broker only when actually expended for the benefit of the client or five days after notice of the proposed withdrawal has been mailed to the client. (8) Every mortgage banker or mortgage broker must maintain a record listing all persons employed by that firm who have signatory authority to disburse funds held in the trust account and the date such authority begins and ends.