Sign of the times: House imposes new lending rule

he House passed a Senate bill to require lenders to pay their fees to closing attorneys with certified funds, after the Homebanc collapse last year left dozens of Georgia closing attorneys holding rubber checks.

Senate Bill 355 would require mortgage lenders to provide funds in the form of a cashier's check or a few other guaranteed payments.

Homebanc Mortgage Corp. filed Chapter 11 bankruptcy last August, after writing an estimated $18 million to $28 million in checks that it couldnâ??t cover.

The bill strengthens the state's existing "good funds" law, which requires that checks deposited in attorneys'?? escrow accounts clear before they disburse them. The Homebanc collapse revealed that attorneys routinely were paying out money before the checks cleared, the Fulton County Daily Report reported last year.

The House amended the bill, requiring Senate approval or a conference committee before final passage.