Posted by pat/WA on 4/24/13 3:39pm
Msg #466971

Need an Opinion

A title companies instructions requested a cashiers check. When we arrived at the signing the borrower informed me that due to the amount of the check a personal check would be OK.
We accepted a personal check and now the Title company is very upset>

Reply by Ronnie_WA on 4/24/13 3:41pm
Msg #466972

Unfortunately they have a right to be upset. They are governed by banking regulations that require certain funds clearance timeframes so it is critical to follow their instructions. Sorry

Reply by BrendaTx on 4/24/13 7:19pm
Msg #467015

Ronnie - thanks for your response and explanation.

I am assuming that you know b/c you have experience in that realm of things and I appreciate the info.

Reply by monet/MI on 4/24/13 3:45pm
Msg #466973

I would have called the title company to ask them if a personal check was okay. If it was not okay, then I would have followed they instructions.

Reply by monet/MI on 4/24/13 3:46pm
Msg #466974

I mean "their" instructions

Reply by Pam/NM on 4/24/13 3:48pm
Msg #466975

Pat, I'm not sure what you are asking. When you say "we" accepted a personal check, was the "we"you, the lender, ss...who? It's possible that the b/o can tell you who told them it would be ok and document that, but if Title says cashier's check, that's what they want. Maybe they could return b/o's personal check and accept a wire transfer?

Reply by kcg on 4/24/13 3:58pm
Msg #466978

I think "we" is Pat and her husband jointly do the signings.

Almost every t/c will send instructions stating that a personal check is/is not ok for certain amounts and over that it must be certified, cashiers, etc. If there are no instructions, I typically will call if amount is over $500.

There have been cases where I will have a BO tell me that his LO said a personal check is ok. I try to contact t/c to verify that. If I can't reach anyone, I make sure I send a note with check letting t/c know. I have never had any backlash on that.

Reply by Gregory/CA on 4/24/13 4:02pm
Msg #466980

I, too, have had BOs indicate their LO said a personal check was fine. Thankfully, they had it in their email and they provided me a copy of their email to include in the return packet.

I've also had a Cashiers Check made payable to a different party other than based on the instructions. Luckily, this too was in email and a copy of it was sent with the return packet.

I haven't heard back on either one so it is presumed to have not been an issue.

Reply by pat/WA on 4/24/13 4:55pm
Msg #466987

Thanks
Looks like this was a big issue or at least the title company is making it an issue. They say I didn't follow instructions. Since the loan officer told the borrower that a personal check was OK, I don't know what I could have done. But, it won't happen again!

Reply by Ronnie_WA on 4/24/13 5:00pm
Msg #466989

LO's generally are not informed as to title company requirements and they do this alot. The LO is in charge of the transaction, except when it comes to funds and vesting/title clearing issues. Not to worry. You won't get caught again

Reply by JanetK_CA on 4/25/13 4:22am
Msg #467083

I sooo agree, Ronnie. I've run into that many times. Some LOs will tell them anything just to get it to close - and some frankly, just don't understand the process, don't even know that the check goes to the title co and not the lender - but thankfully that's the exception. I don't take it at face value, just because the LO says it's OK. We'll likely have a discussion about it and go over the possibilities, unless we can reach someone else who can answer for the tc.

But I HAVE run into situations where the LO was right, for a fairly large personal check, but that's usually been where the borrower has substantial funds on deposit with the bank (or credit union) who is issuing the loan - and sometimes it's an in-house escrow. You never know. It sure is nice, though, when the closing instructions tell us what the threshold is for personal check acceptance.

Reply by GOLDGIRL/CA on 4/24/13 5:02pm
Msg #466990

That's the problem (one of many) with LOs. They have no idea what's going on. The important thing - the ONLY thing - is to follow the instructions of your hiring agency, in this case the TC, no matter what the lender, borrower or LO say.

I've been stuck in that position, too. Fortunately, I was able to call the TC who told borrowers no way with a personal check. At night signings, I took the check, but told borrower they may be hearing from title the next day and that I or title might be returning check.

Sometimes they made the LO pay for FedEx so the borrower could get a cashier's check in on time after telling them a pers. ch. was OK! Hee Hee.

Reply by LKT/CA on 4/24/13 6:37pm
Msg #467006

<<< When we arrived at the signing the borrower informed me that due to the amount of the check a personal check would be OK.>>>

Written instructions from your hiring party prevail. If it's not in writing....it's hearsay until you can verify it with your hiring party.

Reply by NVLSlady/VA on 4/24/13 11:23pm
Msg #467054

had a TSI/quicken the other night and I'm pretty sure the instructions said personal check OK up to $15k (unless I was just cross-eyed); but I remember reading with borrower.

Since it's somewhat taboo in VA to collect without an escrow license, I just tell them to contact their lender for clarification of what, when and where

Reply by sigtogo/OR on 4/25/13 1:06am
Msg #467077

had one where LO gave BO amt for cashiers check-off 63 cent

called title and they wanted a different CC ck for the correct amount! too funny! they finally agreed to personal ck for the 63 cents. moral: always call title!!

Reply by ReneeK_MI on 4/25/13 7:04am
Msg #467085

Every state has their own "Good Funds" laws

Ronnie/WA is correct that settlement funds are governed by laws. With all due respect to L/O's - it is great when they understand their own state's laws but it isn't in their job description.

Regardless of state:

1. Cash is NEVER acceptable.

2. Personal checks are limited by law - AND by title U/W's, AND by individual Settlement offices. Those limits vary & lacking written instructions from SETTLEMENT (and nobody else), a phone call is in order.

3. Cashier's checks preferred, Certified usually accepted, wire transfers save the day. Funds are almost always (always is just too large a word, always!) payable to the Settlement Agent as shown on the HUD.

4. When faced with unacceptable funds or short funds - they can always wire them, just obtain wiring instructions for them. If it's after hours & title/settlement is unavailable, I 'cross-reference': tell Borrower's they must get wire instructions from title & wire early the next day & give them contact info AND I tell title Borrower needs wire instructions & is prepared to wire early next day, and give them B's e-mail/fax. If I am able to reach title - I make sure B' has wire instructions in hand before I leave. Even if he can't print a fax/scan, he can write it all down on paper.

5. I might add - if B's are over-funded, never a problem, refund of excess will be sent by title.

I do a lot of purchase closings, and deal with this all day long. RE Agents & L/O's OFTEN give buyers/borrowers misinformation - again, nice when they know the correct process, but not really their job. Once had a buyer bring me over $40k in CASH - most recently, had buyer bring certified funds made out to the Seller (RE Agent told him to do that).

Reply by ReneeK_MI on 4/25/13 7:09am
Msg #467086

One more thing to add about funds

It's very common on a purchase for buyer's to be told by L/O or RE Agent to bring cashier's check made out to themselves. I have no idea where/why that got started, but it's very common. Make SURE the buyer endorses the check on the back, and for safety's sake - write "Payable only to (name of Settlement Agent as named on Hud)".