10 Tips to Prevent Fraud and Theft on Your Escrow/Trust Accounts
|March 21, 2013|
By Jonathan Yasko
We have moved from an industry concerned with the issuance of title insurance, to an industry focused on compliance and potential financial loss from the settlement agent. Each day I am asked by agents, attorneys and underwriters, “what procedures can we put in place to prevent fraud and theft from happening to us?” While absolute prevention may be impossible, you can make it so difficult for a fraudster that they will seek other opportunities.
So, what can you do? First and foremost, reconcile your escrow/trust account in a timely fashion. There is a reason why underwriters want to see your reconciliations by the 15th of the month for the previous month’s transactions. Escrow reconciliations are the best business tool you have as an owner, manager or escrow agent. You can tell where your business comes from, how healthy your company is as a whole, what areas you need improvement and what work still needs to be done for a closing file. Run a Trial Balance Report each day to see what files need immediate attention.
Second, find a bank that you can have a good business relationship with. Banks will tell you whatever you want to hear because they know of the high balances title agents and real estate attorneys maintain. Try to find a bank that doesn’t charge you for wire fees or large-account analysis fees. A good bank will have ACH blocks on the escrow account and have the ability to offer you Positive Pay. They should also alert you to incoming and outgoing wire reminders for no charge. Remember, a good bank will work with you in good times and bad.
Other high-level points of interest: