Idaho License Law
An Idaho broker opens a trust account. Which type of financial institution is acceptable for holding client trust funds?
AAny institution where the broker has personal accounts
BA federally or state-chartered financial institution insured by FDIC or equivalent✓ Correct
CA private investment account
DOnly a title company escrow account
Explanation
IREC rules require that broker trust accounts be held at federally or state-chartered institutions with federal deposit insurance (FDIC or NCUA), protecting client funds.
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Key Terms to Know
Escrow
A neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Title InsuranceInsurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
State-Specific Concepts
Trust Account Rules
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