Deposits in lieu of bond; payment of claims; waiver
(1)Any escrow agent may satisfy the requirements of ORS 696.525 (Bond for escrow agents) by depositing with the State Treasurer, in an amount equal to the surety bond required, a deposit consisting only of the following:
(b)Ample secured obligations of the United States, a state or a political subdivision thereof;
(c)Certificates of deposit, assignments of certificates of deposit or other investments described in ORS 733.650 (Investment of funds in certain obligations and other specified items) (4), to the extent that such investments are insured by the Federal Deposit Insurance Corporation;
(d)A certified, annually renewable letter of credit executed by a financial institution and satisfactory to the Real Estate Commissioner in the amount of the surety bond required by ORS 696.525 (Bond for escrow agents); or
(e)Any combination of paragraphs (a), (b), (c) and (d) of this subsection.
(2)The State Treasurer shall accept and hold the deposit for the faithful performance of escrow activity by the escrow agent. No claimant or judgment creditor or the escrow agent shall have the right to attach or levy upon any of the assets or securities held on deposit.
(3)The commissioner, by order, may authorize the State Treasurer to use such deposit, as follows:
(a)To satisfy any final judgment entered against the escrow agent for actual damages suffered by any person by reason of the violation of any of the provisions of ORS 696.505 (Definitions for ORS 696.505 to 696.590) to 696.590 (Penalty amounts), now or hereafter enacted, or by reason of any fraud, dishonesty, misrepresentation or concealment of material fact growing out of any escrow transaction;
(b)For use in the liquidation of the escrow agent under the provisions of ORS 696.555 (Commissioner to take possession of property and assets of escrow agent when assets or capital impaired); or
(c)To release any or all of such deposit to the escrow agent when, in the opinion of the commissioner, such deposit is no longer necessary to protect the public.
(4)The commissioner may waive the requirement of the surety bond or deposit for any escrow agent that:
(a)Demonstrates to the commissioner’s satisfaction that the capital and surplus or net worth, of such escrow agent as of the end of the previous business accounting year of the agent is equal to, or greater than, the average month-end balance of custodial funds held by such agent during the previous business accounting year; or
(b)Provides a certified, personal guarantee executed by one or more owners of the escrow agency and satisfactory to the commissioner in the amount of the surety bond required by ORS 696.525 (Bond for escrow agents).
(5)All other claims against the bond or deposit of an escrow agent must be paid by the commissioner only upon the receipt of a final court judgment against the escrow agent and only in the amount of actual damages as ordered by the court. [1977 c.351 §3; 1981 c.617 §24; 1991 c.874 §5; 1999 c.107 §11; 2003 c.427 §8; 2009 c.174 §4]
Atty. Gen. Opinions
Sales of subdivision lots by mobile home salespeople, (1975) Vol 37, p 865; sales or offers of interests in limited partnerships to invest in real estate, (1978) Vol 38, p 1971