At the same time as there is an increase in email scams targeted at the settlement services industry, there is a continued discussion, particularly at the state level, at what is considered good funds and whether collecting good funds is enough to protect agents and their customers. During the National Settlement Services Summit, two leading escrow professionals will provide insights into the latest.
David A. Shean, CSEO/CEI, Escrow Essentials/American Escrow Association, noted that there is a national Regulation CC which provides a definition of good funds. In addition, several states have their own good funds requirements, some of which are changing, and there are states that do not have these requirements.
“It’s important for settlement agents to be aware of what their requirements are and how they can protect themselves from complying with the law and still having a loss,” he said. “The concept is that in states that do have good funds laws, you can be in compliance with those 100 percent, but that doesn’t mean that [you are not at risk].
“If you disburse other people’s money from your trust account based on the fact that they were considered good, but they were not collected, your recourse is to pull money out of your pocket and put it in,” Shean continued. “Compliance with the law is not necessarily going to protect you in the case you are [the victim of] the scheme.”
He also said that agents shouldn’t use their interpretation of the good funds law to “out” service the competition.
“Don’t use your ability to work around a system as a servicing tool,” Shean stated. “Protect everybody in compliance with getting good and collected funds so that when we disburse other people’s money, we are always disbursing on funds that were really there.”
Shean, will present with Art Davis, executive director, American Escrow Association, on Friday, June 9 at the National Settlement Services Summit in a session titled, “Good funds done right.”
For more information on the 2017 NS3, including the agenda and a list of speakers, click here. You can register for NS3 online or click here to get information on how to register via mail, fax or phone. For sponsorship opportunities, email [email protected]