NRS645E.430. Trust account required for money deposited to pay taxes or insurance premiums; fiduciary duty of mortgage banker; accounting to debtor and Commissioner; additional duties and prohibitions.

      1.  All money paid to a mortgage banker for payment of taxes or insurance premiums on real property which secures any loan made by the mortgage banker must be deposited in an insured depository financial institution and kept separate, distinct and apart from money belonging to the mortgage banker. Such money, when deposited, is to be designated as an “impound trust account” or under some other appropriate name indicating that the accounts are not the money of the mortgage banker.

      2.  The mortgage banker has a fiduciary duty to each debtor with respect to the money in an impound trust account.

      3.  The mortgage banker shall, upon reasonable notice, account to any debtor whose real property secures a loan made by the mortgage banker for any money which that person has paid to the mortgage banker for the payment of taxes or insurance premiums on the real property.

      4.  The mortgage banker shall, upon reasonable notice, account to the Commissioner for all money in an impound trust account.

      5.  A mortgage banker shall:

      (a) Require contributions to an impound trust account in an amount reasonably necessary to pay the obligations as they become due.

      (b) Within 30 days after the completion of the annual review of an impound trust account, notify the debtor:

             (1) Of the amount by which the contributions exceed the amount reasonably necessary to pay the annual obligations due from the account; and

             (2) That the debtor may specify the disposition of the excess money within 20 days after receipt of the notice. If the debtor fails to specify such a disposition within that time, the mortgage banker shall maintain the excess money in the account.

Ê This subsection does not prohibit a mortgage banker from requiring additional amounts to be paid into an impound trust account to recover a deficiency that exists in the account.

      6.  A mortgage banker shall not make payments from an impound trust account in a manner that causes a policy of insurance to be cancelled or causes property taxes or similar payments to become delinquent.

      (Added to NRS by 1999, 3754; A 2003, 3566)