loan agreements; escrow

HB 2345 clarifies how escrow agents may use funds in escrow accounts for loan agreements. It restricts escrow agents from using these funds for any purpose other than making payments under the loan agreement, unless one of four specific exceptions applies: (1) the loan agreement explicitly permits another use, (2) a deed in lieu of foreclosure agreement specifies an alternative use, (3) parties negotiate a settlement agreement including fund usage terms, or (4) a portion of funds is used to bring an overdue account current. The bill explicitly states it makes only clarifying changes to existing law, not substantive ones. The bill passed the Arizona legislature and was signed into law by the governor on March 31, 2025.