Much of the escrow process is hidden from public view, and its function is often a mystery to the outside world.  To a great extent, this is due to the confidentiality of the information we encounter, but it also results from a variety of ancillary tasks which settlement agents must perform in every escrow as a result of government regulation.  You might be surprised to hear about some of the tasks escrow personnel are performing while they are ordering statements of account and distributing documents for completion and signature:

Mortgage Lender Assistance.  Under Federal regulation, mortgage lenders are pressed to immediately deliver precise cost estimates (variances to final costs are severely restricted) to borrowers — within three days of making application for a new loan.  This usually occurs alongside the opening of escrow, because the property address is typically the last bit of information needed to complete the loan application.  The result is a scurry to gather all known facts about the transaction, things that may not be immediately known: is the individual borrower married, and a separate deed needed from the spouse?  Will multiple borrowers require multiple signing appointments (and Notaries)?  The pressure is on, and the provision of cost information by the escrow holder is critical to helping the lender meet their short deadlines.

License Verification.  Only licensed Real Estate Brokers may receive compensation in the form of commission payments from real estate sales.  This restriction makes good sense!  Buyers and Sellers can rest assured that they are receiving the appropriate level of disclosure and expertise in the broker who will represent them through their purchase or sale.  Since the independent escrow holder distributes these payments, the Department of Business Oversight demands that we verify the license of every broker before we issue them checks for commissions earned.  Evidence of a Bureau of Real Estate license is stored in every escrow file!

Checking principals too!  Buyers and Sellers quickly understand that we will need to collect a variety of data from each of them – Statements of Information from individuals, Certifications and copies of Trust documents from trustees, Operating Agreements, Corporate Resolutions.  This information is gathered to qualify the authority of individuals, and to eliminate potential personal lien issues that might affect the transaction. But you may be surprised to hear that the escrow office will also check the names of each and every principal against the Specially Designated Nationals list published by the U.S. Treasury’s Office of Foreign Assets Control.  This additional verification is required of settlements agents to ensure that no monies are paid through escrow to persons who are prohibited from doing business in the United States.

Finding you, again.  It is not uncommon for the escrow office to receive post-closing refunds of payments made through the settlement.  As your fiduciary, we make every effort to get these funds to you, even though just about everyone has changed residences by this time.  Tax refunds occur regularly due to reassessments as well as duplicate payments made by mortgage lenders and money managers. It also happens that some of the Buyer refunds (and other payments) we issue at closing get lost in the moving shuffle and remain uncashed.  We keep close tabs on our bank statements and watch for any checks which are not cashed promptly.  If a payment remains outstanding for an extended period, we will be searching for you to confirm you still have our check, or stop payment on the original so that we may reissue.