Escrow agents.

Existing law, the Escrow Law, provides for the licensure and regulation by the Commissioner of Corporations of persons engaged in business as escrow agents, unless specifically exempted from licensure. Under the Escrow Law, a "licensee" is defined as any person holding a valid, unrevoked license as an escrow agent, and an "escrow agent" is defined as any person engaged in the business of receiving escrows for deposit or delivery. A willful violation of the Escrow Law constitutes a crime. This bill would require a licensed escrow agent and any person acting as an escrow agent who is exempt from licensure under the Escrow Law to return or cause to be returned to the bidder all deposits and fees received from that bidder in connection with an auction sale of real property that has been the subject of a foreclosure sale, upon receipt of escrow instructions from the bidder and auctioneer or auction company directing the return of all funds placed on deposit by the bidder with that agent or person, except as specified. Existing law requires each person licensed under the Escrow Law to establish a bond with the commissioner and to participate as a member of Fidelity Corporation, a nonprofit mutual benefit corporation, established to indemnify its members against loss. This bill would require the surety or sureties of a bond established by an escrow agent to give notice to the commissioner and to Fidelity Corporation of any release, substitution, cancellation, withdrawal, or nonrenewal of a bond. Because a willful violation of these provisions would constitute a crime, this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.