In the news ... Tuesday, May 06, 2014

Mid-Atlantic Area

 

Pennsylvania

Three Glenhardie Corporate Center

1265 Drummers Lane, Suite 220

Wayne, PA  19087

(610) 687-8020

(800) 842-2080

(610) 687-6056 - fax

 

Calder Square

P.O. Box 10326

State College, PA  16805-0326

(814) 238-3600

(814) 238-3604 - fax

 

125 Technology Drive, Suite 101

Canonsburg, PA  15317

(866) 364-2777

(724) 746-5434 - fax

 

Delaware

32 The Green

Dover, DE  19901

(302) 734-3570

(800) 722-0784

(302) 734-3254 - fax

 

The 800 King Street Building

800 King Street, Suite 304

Wilmington, DE  19801

(302) 661-1997

(302) 661-1996 - fax

 

Maryland

Columbia Corporate Park

8850 Stanford Blvd., Suite 2900

Columbia, MD  21045

(410) 953-6763

(800) 664-8306

(410) 953-6761 - fax

 

Virginia

9303 Center Street, Suite 101

Manassas, VA  20110-5547

(703) 365-2300

(800) 232-6817

(703) 365-2400 - fax

 

1503 Santa Rosa Road, Suite 233

Richmond, VA  23229

(804) 288-4090

(888) 859-922

(804) 288-4092 - fax

Safeguarding against recall of transmitted funds


Funds can be electronically transferred to us either by wire or by an automated clearing house (ACH).  There are differences between wires and transfers via ACH and the latter are more vulnerable to recall.  This does not happen frequently, but funds transferred through an ACH can be reversed, provided the guidelines of the ACH are adhered to.  ACH transfers have regularly been used by some subprime lenders and unsuspecting title agents have been surprised by recalls of funds they thought were collected and not reversible. 

What can a title company do to protect itself from this possibility?  One possibility is to confirm with your bank its procedures regarding reversal of funds.  Some banks will not authorize this practice without the consent of the account holder.  If your bank authorizes funds reversal without your consent you may inquire as to whether the bank will set up a hold or block (commonly called "debit blockers" or debit filters") on your account so that any reversal or recall must be authorized by you.  If your bank will not, the following guidelines may help:

  1. Do not transfer via wire transfer if you receive funds via ACH.  They are not the same.
  2. If you must receive an ACH transfer, treat it as you would treat a personal check with an appropriate holding time to "clear", usually one to three business days (discuss this with your bank).
  3. Consider establishing a separate account for incoming transfers only, and then transfer the money immediately to your escrow account upon receipt.  It may be harder to recall a transfer once it leaves the receiving account.
  4. If you are unsure of the financial stability of a lender with which you are doing business, require a wire transfer.

Should you have any questions, please contact our underwriting counsel: Steve Gratman; Sue Swick or Dwight Edwards.


 

Please contact Sue Morgan at Old Republic Title with any questions
or give us a call at 610-687-8020 or 800-842-2080. 

 

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Old Republic Title Update is published by the Mid-Atlantic Area Office of Old Republic National Title Insurance Company in an effort to provide information relative to our industry on a timely basis. None of the materials included in this publication should be deemed legal or underwriting advice or should be acted upon without prior consultation with your underwriter or counsel.