LRBs0381/6
KSH:skg:ks
1995 - 1996 LEGISLATURE
SENATE SUBSTITUTE AMENDMENT 1,
To 1995 SENATE BILL 417
March 19, 1996 - Offered by Committee on Education and Financial Institutions.
SB417-SSA1,1,2 1An Act to create 708.10 of the statutes; relating to: loan funds availability at
2real estate closings.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB417-SSA1, s. 1 3Section 1. 708.10 of the statutes is created to read:
SB417-SSA1,1,4 4708.10 Loan funds at closings. (1) Definitions. In this section:
SB417-SSA1,1,65 (a) "Affiliate" means, with respect to any lender, any person that controls, is
6controlled by, or is under common control with, the lender.
SB417-SSA1,1,87 (b) "Borrower" means a person who borrows money from a lender to finance a
8transaction under a loan that is secured by a real estate mortgage.
SB417-SSA1,1,139 (c) "Lender" means all lenders identified under s. 706.11 (1), loan solicitors, as
10defined under s. 440.71 (2), and savings and loan associations organized under ch.
11215, except that "lender" does not include any federal, state or local unit of
12government or any agency, political subdivision or instrumentality of such a unit of
13government.
SB417-SSA1,1,1414 (d) "Loan settlement" means the occurrence of all of the following:
SB417-SSA1,2,3
11. The execution by the borrower of a promissory note, mortgage and any other
2documents that are required by the lender to be signed as a condition to the granting
3of a loan to the borrower.
SB417-SSA1,2,54 2. The delivery of the proceeds of the loan to the borrower or to a 3rd party on
5behalf of the borrower.
SB417-SSA1,2,76 3. If the borrower has a right to rescind the loan under federal or state law, the
7expiration of the borrower's right of recision.
SB417-SSA1,2,88 (e) "Qualified loan funds" means any of the following:
SB417-SSA1,2,99 1. Wire transfer.
SB417-SSA1,2,1010 2. Cashier's check.
SB417-SSA1,2,1211 3. A check that is negotiable, as defined in s. 403.104 (1), and on which the
12lender or an affiliate of the lender is the payer.
SB417-SSA1,2,1413 4. Transfer of the loan funds by the lender into an account maintained by the
14lender or an affiliate of the lender in favor of the settlement agent or borrower.
SB417-SSA1,2,1715 (f) "Settlement agent" means a person retained by the lender who provides
16services that benefit the lender and borrower in a transaction and who receives and
17disburses money in connection with the transaction.
SB417-SSA1,2,2118 (g) "Transaction" means a transaction under s. 706.01 (1), including a
19refinancing of an existing indebtedness that is secured by a mortgage on real
20property, except that "transaction" does not include an open end credit plan as
21defined under 15 USC 1602 (i).
SB417-SSA1,2,2422 (h) "Wire transfer" means the electronic funds transfer system of the federal
23reserve banks. When funds are transferred by wire transfer, delivery of the funds
24is complete when a transaction number has been assigned to the wire transfer.
SB417-SSA1,3,6
1(2) Loan fund dispersal. (a) Except as provided in par. (b), if a settlement
2agent is to deliver qualified loan funds to the borrower in a transaction, or to a 3rd
3party on behalf of the borrower, a lender may not permit or require a borrower to
4complete a loan settlement unless the lender unconditionally delivers qualified loan
5funds to the settlement agent before or immediately on completion of the loan
6settlement.
SB417-SSA1,3,107 (b) If the lender and the borrower have agreed that less than all of the loan
8funds are to be disbursed at the loan settlement, the lender shall deliver qualified
9loan funds to the settlement agent only in the amount to be disbursed at the loan
10settlement.
SB417-SSA1, s. 2 11Section 2. Initial applicability.
SB417-SSA1,3,13 12(1) This act first applies to transactions entered into on the effective date of this
13subsection.
SB417-SSA1, s. 3 14Section 3. Effective date.
SB417-SSA1,3,16 15(1)This act takes effect on the first day of the 3rd month beginning after
16publication.
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