Lastly by writing a check for the loan payment when

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disbursements. Lastly, by writing a check for the loan payment when the broker knew insufficient funds existed in the account to cover the check, the broker misrepresented the availability of immediate funds. This is considered fraud and is grounds for the revocation or suspension of the broker’s license.2Alternatively, consider a broker who maintains a brokerage trust account. The trust account contains loan payments received by the broker while servicing loans on behalf of trust deed investors. The broker pledges the trust account to secure a personal loan from the same bank which holds the trust account. The broker defaults on the loan, and the bank seizes the trust account funds. An investor seeks to recover their trust account funds from the bank, claiming the bank’s seizure of the funds is a conversionsince trust funds cannot be taken to satisfy the broker’s personal debt. 2 Apollo Estates, Inc.v. Department of Real Estate(1985) 174 CA3d 625general accountA broker or agent’s personal or business account, not to be commingled with trust funds.subaccount ledgerAn accounting document or file identifying the owner of trust funds and the amount held for the owner.conversionThe unlawful appropriation of another’s property, as in the conversion of trust funds.Conversion trust of funds
48 Real Estate Principles, Second EditionThe bank claims the seizure of the trust account is not a conversion since it exercised its right to an offset under the security agreement. Is the investor entitled to recover their portion of the trust funds?
3Funds received in the form of cash or checks made payable to the broker while acting as an agent are to be:

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