Georgia Attorneys Title Guaranty Fund

Underwriting Bulletin No. 64

August 8, 2000

SUBJECT: DISBURSING FUNDS
Lately there has been a significant increase on both a state and national level in the number of problems First American agents have experienced related to escrow shortages created by lenders failing to fund loans. The purpose of this Underwriting Bulletin is to make you aware of the increased frequency of these funding issues, especially when dealing with sub-prime lenders.

If there is any doubt regarding the ability of a lender to fund a loan, make certain to require that the funds be wired before disbursing or wait for the funds to be collected by your bank before disbursing.

You are also reminded that you should check the Caveats previously provided for each transaction. If you are asked to insure a transaction involving an entity on a Caveat, we request that you contact the Georgia Underwriting Department before committing to do so.
Our experience has not been limited to uncollectable checks. In one circumstance, a lender confirmed to the closing agent that the funds were wire transferred and the closing agent did not verify the wire transfer with the bank directly. The agent disbursed and it was later determined that the wire transfer did not take place. While the agent did ultimately receive the funds, this did not occur for a number of weeks following the closing. In other situations, funding checks have been dishonored or the lender has delayed funding based upon the claim of an improperly completed loan package.

If you have any questions, please contact the Underwriting Department at 404-250-1604 or 800-328-2642.

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