A Washington borrower mother sends $700 directly to the broker in 2026 to cover her son appraisal fee. Are these funds classified by their third-party-service purpose or by the mother’s identity as sender?
Correct Answer
B) Trust funds: they are identified by purpose and not by source
Trust funds are identified by purpose rather than source, so funds received from relatives of borrowers or from the seller in a real estate transaction are trust funds, as are broker advances deposited to a borrower subaccount. Other choices: the sender not being the borrower is exactly the point the rule settles; being a party to the loan is not the test; and reimbursement between family members is irrelevant. Source: WAC 208-660-410(6)
Why This Is the Correct Answer
Trust funds are identified by purpose rather than source, so funds received from relatives of borrowers or from the seller in a real estate transaction are trust funds, as are broker advances deposited to a borrower subaccount. Other choices: the sender not being the borrower is exactly the point the rule settles; being a party to the loan is not the test; and reimbursement between family members is irrelevant. Source: WAC 208-660-410(6)
More UST Questions
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