We have compiled the Good Funds law for each state. Each Escrow Agency and Title Company have created their own timing of hold periods, dollar amount thresholds and types of "Good Funds" payments accepted.
Your closing agent is not able to close or disburse any funds prior to all deposits of checks, drafts, wired funds or cash deposits made to the escrow account having "cleared the bank" or having become good, usable funds. The term "good funds" means that the escrow account funds are fully available for withdrawal. Although payment types may vary from state to state, the most common or preferred type of closing funds are:
One of the most effective ways to guarantee "good funds" is the use of wire transfer funds. A wire transfer is a method utilized to transfer of funds electronically. An Escrow Agency or Title Office can arrange to receive the wire transfer funds from a lender or buyer. Most banks require all signatories on the account appear, in person, to effectuate a wire transfer.
Cashier's check (sometimes referred to as a bank check)
A cashier's check is, a physical draft, drawn by a financial institution and debited from your account. This means, of course, that you can’t get a cashier’s check unless you actually have the available funds in your account and you appear in person at your bank.
12 CFR Part 229 - AVAILABILITY OF FUNDS AND COLLECTION OF CHECKS (REGULATION CC)
Once your account is debited, the financial institution is responsible for paying the payee. The cashier's check is signed by a representative of the financial institution and made payable to a third party (usually the seller or the seller's lender). These checks are secured by the funds of the issuer — the financial institution — and include the name of a payee (the entity to which the check is payable - the seller or its lender) and the name of the remitter (the entity that paid for the check - you).
Types of funds your closing office may not accept
Good Funds ARE NOT just Wires and Cashier's Checks any longer!
Our "Good Funds" payment gateway allows for real-time payment, immediate, irrevocable, interbank account-to-account transfer that utilizes a real-time messaging system connected to every end-user through your financial institution. Funds are available for use by the receiver and real-time confirmation is provided to both to you ("the sender") and receiver in seconds.
Your money and data are serious business. Our white glove approach ensures your data is highly protected and available online real-time.
Enrolling in the GoodFundsGateway system takes only a few minutes. You can eliminate "paper" checks from your system and start sending electronic payments in just a few simple steps.