Deposit and designation of funds held in escrow
- treatment of earnings on escrow account
(1)All funds received by an escrow agent to be delivered upon the close of the escrow or upon any other contingency are trust funds that must be deposited and maintained in a bank authorized to do business within this state. The funds must be deposited in a federally insured account designated as an escrow trust account and kept separate, distinct and apart from funds belonging to the escrow agent. The designation of an account as an escrow trust account indicates that the funds are not the funds of the escrow agent.
(2)Trust funds received by an escrow agent may be placed by the agent in a federally insured interest-bearing bank account, designated as an escrow trust account, but only with the prior written approval of all parties having an interest in the trust funds. The earnings of the interest-bearing account may inure to the benefit of the escrow agent if expressly approved in writing before deposit of the trust funds by all parties having an interest in the trust funds.
(3)With prior written notice to all parties who have an interest in the trust funds, an escrow agent may place trust funds received by the escrow agent in a federally insured interest-bearing bank account that is designated as an escrow trust account and the earnings of which inure to the benefit of a public benefit corporation, as defined in ORS 65.001 (Definitions), for distribution to organizations and individuals for first-time homebuying assistance and for development of affordable housing. The escrow agent shall select a qualified public benefit corporation to receive the interest earnings.
(4)Any bank services, as defined by rule by the Real Estate Commissioner, provided to the escrow agent may not be considered to affect the impartiality or neutrality of the escrow agent. Such services are permitted with approval in the written closing instructions of the principals.
(5)Trust funds may be invested in secured obligations of the United States, if:
(a)The depositing principal gives prior written approval to the escrow agent for such investment after receiving written disclosure as may be required by rule adopted by the commissioner;
(b)The depositing principal releases the escrow agent from any liability for loss of the trust funds;
(c)The depositing principal agrees that any loss of trust funds may not be a claim against the bond, deposit or personal guarantee of the agent under ORS 696.525 (Bond for escrow agents) and 696.527 (Deposits in lieu of bond); and
(d)The escrow agent does not have any interest in the investment or earnings from the investment.
(6)If the trust funds to be invested represent earnest money in a transaction, both principals in the transaction must give prior written approval for the investment and are both considered depositing principals. [Formerly 696.560; 1991 c.874 §10; 2003 c.224 §2; 2003 c.427 §12; 2009 c.174 §10]
Section 696.578 — Deposit and designation of funds held in escrow; treatment of earnings on escrow account; notice,
See annotations under ORS 696.560 in permanent edition.