Sponsored by:
Senator KEVIN J. O'TOOLE
District 40 (Bergen, Essex, Morris and Passaic)
Senator BOB SMITH
District 17 (Middlesex and Somerset)
SYNOPSIS
Prohibits escrow agent evaluation services from charging escrow agents fees.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning escrow agent evaluation services and supplementing P.L.1960, c.39 (C.56:8-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. It shall be an unlawful practice for any person or entity to prepare a report for use by a mortgage lender in evaluating the capacity of an escrow agent to perform real estate settlement services, in exchange for a fee charged to that escrow agent.
b. As used in this section, "escrow agent" means an independent person, including an independent bonded escrow company, an independent financial institution whose accounts are insured by a governmental agency or instrumentality, an independent licensed title insurance agent, or an attorney licensed to practice law in this State, who is responsible for the receipt of any written instrument, money, evidence of title to real or personal property, or other thing of value to be held until the happening of a specified event or the performance of a prescribed condition, when it is then to be delivered in connection with the transfer of real estate.
2. This act shall take effect immediately.
STATEMENT
This bill makes it an unlawful practice under the consumer fraud act for an escrow agent evaluation service to prepare a report for use by a mortgage lender in evaluating the capacity of an escrow agent to perform real estate settlement services, in exchange for a fee charged to that escrow agent.
The bill defines “escrow agent” as an independent person, including an independent bonded escrow company, an independent financial institution whose accounts are insured by a governmental agency or instrumentality, an independent licensed title insurance agent, or an attorney licensed to practice law in this State, who is responsible for the receipt of any written instrument, money, evidence of title to real or personal property, or other thing of value to be held until the happening of a specified event or the performance of a prescribed condition, when it is then to be delivered in connection with the transfer of real estate.
An unlawful practice under the consumer fraud act is punishable by a monetary penalty of not more than $10,000 for a first offense and not more than $20,000 for any subsequent offense. In addition, violations can result in cease and desist orders issued by the Attorney General, the assessment of punitive damages and the awarding of treble damages and costs to the injured party.