We all know that payoff letters state that funds must be remitted by wire, cashier/bank check, or certified check and we all know that for years a “title” company check was acceptable. Well, the party is over. GMAC called to tell me that they would process my check but in the future, payoffs would only be accepted when received by wire, cashier’s/bank, or certified check.
Wells Fargo on Wells to Wells refinances will net a payoff even if the new loan amount is less than the payoff amount; therefore, the title agent will be required to wire funds back to Wells Fargo to complete the transaction. For example, the new loan amount is $175,000 but the payoff and lender fees equals $178,000. You now must wire $3,000 to Wells Fargo. Which means, the borrower, even though you may have taken his or her personal check in the past, now must wire the funds to you or provide you with a cashier’s/bank check so that you can turnaround and wire the $3,000 to Wells Fargo in a timely manner.
Unfortunately, it will now cost the consumer more because there will be a wire fee or bank check fee assessed to them not to mention additional days interest in waiting for non-wired received funds to clear.
With that said, I don’t blame these lenders at all for focusing on loss prevention, I applaud them for paying attention. Afterall, how many more black eyes can this industry take because of defalcations. And a word about “float.” Remember, no one is entitled to your “float.” Every dollar coming into your settlement trust account is assigned to a dollar going out; therefore, “float” should not even be part of a title insurance agent’s vocabulary. Forget about the float.
