We all know the importance of maintaining accurate and compliant data within the title industry. But regarding escrow accounts, how can you as an Agent, ensure the process is moving as it should? When buying and selling a home, the average consumer tends to use the terms “Escrow” and “Title” interchangeably as if they mean the same thing. While both pieces of the transaction rely on one another, escrow and title provide two different services throughout the home-buying process. The title agency issues the title insurance policies that protect both real estate owners and lenders against claims of defects in the title or disputes in ownership of the property. The escrow agency manages the financial aspects of the real estate transaction. Many times, a single agency provides both services, while other times, they may be provided by entirely different companies. In either event, the escrow agent holds the funds provided by the buyer and lender until all documents and conditions of the sale have been fulfilled. Title to the property is then transferred under the terms of the escrow instructions and applicable laws, and the appropriate title insurance policies are issued by the title agent.
ALTA Best Practices – Pillar #2 states: Adopt and maintain appropriate written procedures and controls for Escrow Trust Accounts allowing for electronic verification of reconciliation. (www.Alta.org)
The stated purpose of this procedure is to safeguard client funds to help ensure accuracy and minimize exposure to loss (Click here to read all of ALTA Best Practices procedures.) As a title agency, complying with ALTA Best Practices Pillar 2 can sometimes become difficult and costly. Most closing and settlement softwares do not provide the necessary built-in features to assist with compliance, and in most cases rely on a third-party software to provide these features. With a Reconciliation feature designed to meet the needs of the Agent, TitleFusion facilitates escrow accuracy to protect consumers, promote quality service, and meet legal and market requirements in an easy and cost-effective way.
The TitleFusion Reconciliation Module connects the Agency’s banking data (via secure login credentials with read-only access) to its Closing Ledgers. Daily bank data downloads are auto-matched to posted ledger transactions. Every effort is made to assure that matches are verified and correctly cleared in the appropriate file ledgers. If the Agency is enrolled in positive-pay with the bank, a positive-pay report is created and submitted to the bank up to three times daily to reduce the high risk of fraudulent checks.
Each day the designated Agency personnel receive an instant message with access to the “Daily 3-way Reconciliation Report” providing the following information:
- All unmatched transactions
- Unsent wire transactions
- Outstanding deposit/credits
- Available funds summary
- Undisbursed funds
- Customized alert criteria results
The Reconciliation Module facilitates timely daily matching of all debit and credit transactions so mistakes or fraud can be immediately actioned. Most importantly, the Agency has access to qualified escrow reconciliation experts for support.
AccuTitle’s family of products strives to make it simple for its Agents to achieve ALTA compliance through all facets of the title and closing process. By utilizing the Reconciliation Module, TitleFusion helps improve accuracy with up-to-date escrow information which in turn protects the financial interests of all involved parties. For more information regarding our Reconciliation Module and services, please reach out to firstname.lastname@example.org or visit our website.