N.J. Admin. Code § 3:1-16.8 requires the following:
“Before accepting any trust funds, each lender shall disclose in writing to the party or parties depositing such funds the purpose for which the fund is established, the amount of the trust fund, the period for which the trust fund will be held and the conditions upon which the funds will be disbursed or released.”
“Trust funds” are defined as “funds which are held in accordance with the terms of a written agreement between the lender and the borrower or seller, which provides that upon the occurrence of a specific condition or event the funds or a portion thereof shall be disbursed to the borrower or seller. Trust funds do not include escrows collected or held by the lender for taxes and insurance.” (Ibid. § 3:1-16.1)
Although the use of trust funds in New Jersey are situational, we are pleased to announce that we have created a generic document for this requirement, along with several new fields that may be used to fill out and trigger the document. These fields are:
- New Jersey Trust Fund Type (131869)
- New Jersey Trust Fund Purpose (131870)
- New Jersey Trust Fund Amount (131871)
- New Jersey Trust Fund Time Period and Conditions (131872)
Cx22960 will print under the following conditions:
- New Jersey Trust Fund Type = Borrower
- New Jersey Trust Fund Type = Seller
- New Jersey Trust Fund Type = Borrower and Seller
- State Code = New Jersey
The document uses the values of Fields 131870, 131871, and 131872 to populate the three main disclosure requirements of New Jersey law. The document will be addressed to (and signed by) the borrower, seller, or both, depending on what Field 131869 is set to (Borrower, Seller, or Borrower and Seller).
These changes will take effect on February 22, 2019. If you have any question or concerns about these changes, please contact Client Support at 1.800.497.3584.