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Creditor checks

  • 1.  Creditor checks

    Posted 05-27-2022 08:51

    Hello,

    Wondering everyone's process for creditor/revolving debts that are being paid off at closing. We are currently overnight the check to the customer with instructions on what to do with them. We are struggling with a lot of returned checks and or checks taking a while to cash and customers continually calling and wanting us to stop pay and re issue, when we know it can take some 10-14 days to cash.

     

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    Rachel Petrick | Escrow Operations Manager

    E: rpetrick@firstsourcetitle.com

    D: 216-260-0819

    www.firstsourcetitle.com

    7717 Victory Lane, Suite B

    North Ridgeville, OH 44039

     

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  • 2.  RE: Creditor checks

    Posted 05-30-2022 07:37
    When you say you are sending checks to the customer, which party are you sending the checks to?

    ------------------------------
    Darren Meadows
    Hull Barrett, PC
    Augusta GA
    +1 (706) 722-4481
    ------------------------------

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  • 3.  RE: Creditor checks

    Posted 05-31-2022 12:19

    The majority of our payments to the creditor's are not payoffs, simply payments.  I ran into the same problem as discussed in this email chain several years ago, when I obtained the payment information from the lender with my closing package, as part of the disbursement I sent the payments at funding.  Then I started receiving the same calls from the customer as other closers mentioned, "my payment hasn't been posted"  Now our practice is to have the customer sign a release for us to either make the payment with an invoice they bring in or we will give them the checks to mail as they do each month.  This has almost completely eliminated the issue, if it is a payoff, I treat it just as I would normally treat any payoff and FedEx it to the creditor with the documentation to close the account.

     

    Corinne Kinman

    Moscow Title, Inc.

    127 S Washington, Suite 1

    Moscow, ID  83843

     

    Ph 208-882-4564

    Fax  208-882-4565

     




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  • 4.  RE: Creditor checks

    Posted 05-31-2022 12:41

    We ALWAYS make the payment ourselves.  Usually it is a requirement of either the title binder or the lender instructions which we are bound to follow.  The only way we can control the situation and make sure it is paid off is to do it ourselves.

     

    J. Rawleigh Simmons, Manager

    River Title & Escrow, LLC

    219 Main Street

    P.O. Box 789

    Warsaw, VA 22572

    Tel  (804) 333-0195

    Fax (804) 333-0197

     

    Please note that River Title & Escrow will be closed May 30, June 20, July 4, September 5, October 10, November 8, 11, 24 , 25, December 23 thru January 1, 2022.

     

    NOTE:  To protect seller proceeds from possible scams, River Title & Escrow, LLC will only accept wiring instructions on our notarized proceeds authorization form delivered with the original deed package.  NO EXCEPTIONS.

     

    IMPORTANT NOTICE:  For your protection, contact this office by phone to confirm wiring instructions verbally prior to sending a wire. Never trust wiring instructions sent via e-mail.  Cyber criminals are spoofing email accounts and sending emails with fake wiring instructions.  These e-mails are well done and very convincing.  Always independently confirm any wiring instructions in person or by telephone to a trusted and verified phone number.  Never wire money without verifying wiring instructions.  Our wiring instructions do not change.

     




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  • 5.  RE: Creditor checks

    Posted 05-30-2022 14:34
    We treat them just like a mortgage payoff. Obtain a payoff amount with payoff instructions. We always pay off as a part of closing process. We use ReQuire to track satisfaction on records. It would be extremely rare to rely on a debtor to handle their own payoff. 

    Thank you for your business

    Gail Malloy
    Westmoreland Paralegal Services
    35 W. Pittsburgh St. Suite 300
    Greensburg, PA  15601
    t  724.832.8683
    c 724.420.1015





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  • 6.  RE: Creditor checks

    Posted 05-31-2022 08:43
    I am assuming these are credit cards or auto loans, etc., that a lender is requiring to be paid at closing.  If that is the case, I always require the lender to collect and forward statements prior to closing, then we pay them directly to the creditor.  If the lender is requiring it to be paid, then 2 things: 1) the lender should take responsibility for making sure the title company has the invoice or statement and 2) we have responsibility to make sure funds are received by the creditor timely, per the loan instructions.

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    Nancy L. Gusman, Esq., CLTP, NTP
    GusmanLegal, LLC
    Beltsville, MD
    (301)563-9669
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  • 7.  RE: Creditor checks

    Posted 05-31-2022 09:07
    I like the suggestion to receive statements from the lender, but appears you have had more success with that than us.  We used to pay directly to the creditor (i.e. credit card and the like), but then found it a better process to explain to the borrower at the closing that we will send the checks with a letter to the borrower to pay directly and immediately which has yielded positive results with the occasional outlier.

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    Craig Teitelbaum
    Ardent Title Group, LLC
    Ho Ho Kus NJ
    +1 (201) 857-3690
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  • 8.  RE: Creditor checks

    Posted 05-31-2022 09:28
    Craig,

    I have actually, in the past, sent the check to the lender to send if they didn't provide us with the information we needed to pay the creditor.  After that, I get the statements from them. The biggest problem is when they don't tell us in advance that we'll have to pay them, but with the 3 days for the CD, that is not as much of a problem anymore.

    ------------------------------
    Nancy L. Gusman, Esq., CLTP, NTP
    GusmanLegal, LLC
    Beltsville, MD
    (301)563-9669
    ------------------------------

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  • 9.  RE: Creditor checks

    Posted 06-01-2022 09:27

    Getting statements for payoffs for credit cards, etc. has become a huge problem for us, as well.  We now advise lenders that we are unable to add the line item to the CD/ALTA until we receive a statement from the debtor and request that we contact the debtor directly and explain how to get us the statement.  I have had a couple of lenders push back stating that we are required to fulfil the lender's instructions, and we then respond that we are unable to fulfill those lender's instructions to actually payoff the debt without account statements and addresses to send the payments to.  Simply adding the debt to the ALTA does not pay it off. I have to have an address to send it to.  It seems to be working.  Perhaps ALTA communicating to MBA would be helpful.

     

     

     

    Logo Small.pngAmy Comer Elliott

    The Abstract & Title Companies

    P.O.Box 207

    Danville, IN  46122

    (317) 745.4300

    aelliott@abstract-title.com

    www.abstract-title.com


    WARNING – FRAUDULENT FUNDING INSTRUCTIONS

    Email hacking and fraud are on the rise to fraudulently misdirect funds. Please call your escrow officer immediately using contact information found from an independent source, such as the sales contract or internet, to verify any funding instructions received. We are not responsible for any wires sent by you to an incorrect bank account.
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  • 10.  RE: Creditor checks

    Posted 08-29-2022 09:26

     

     

     

     

     

     

    Jenny M. Carlson

    Settlement Coordinator

    BLUE RIDGE SETTLEMENT COMPANY, LLC 
    529 Carlisle Street
    Hanover, PA 17331 
    (717) 630-9688 Phone 
    (717) 630-0691 Fax

      www.beckerlawgrouppc.com

     

    BECKER LAW GROUP, P.C.

    When Results Matter®

     

     




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  • 11.  RE: Creditor checks

    Posted 05-31-2022 09:15

    Yes,

    These are creditor debts that are needing to be paid off through the loan. For credit cards, car loans etc. Generally, our clients do not provide any type of statements and we have to end up sending these checks (made payable to the debtor) to the customer for them to mail out with their information on it. We generally see a lot of issues with this process the main item the check getting returned to us and or a lot of stop pays being issued. We would like to start requiring the statements so we can mail them out directly. At what point in the process do you require your clients to provide these? What is your policy if you do not get them?

     

     

     

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    Rachel Petrick | Escrow Operations Manager

    E: rpetrick@firstsourcetitle.com

    D: 216-260-0819

    www.firstsourcetitle.com

    7717 Victory Lane, Suite B

    North Ridgeville, OH 44039

     

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  • 12.  RE: Creditor checks

    Posted 05-31-2022 09:36
    Rachel,

    As soon as I am made aware that the lender will require these paid, I contact the loan officer and/or the processor and let them know that we cannot pay a bill without an invoice and that they have to get it to us prior to closing or prior to funding, if it's a refi.  I just tell them that I can't pay the bill without it and that if they want it paid they have to provide it or I'll send the check to them with the closing package.  They usually respond.  If I don't have the invoice at the table, I will tell the borrower that they have to get it to us before the loan funds or the lender may cancel the loan since it is a condition of funding.  That works too.

    I think that when you give it to the borrower to pay it, you are increasing your liability with the lender.  If those checks do not go to the creditor, you are in breach of your loan instructions.  Further, you are risking the borrower fraudulently converting the check to their own use instead of paying the bills.  You'll see the check cleared in your account, but you haven't looked at the check so you don't know that this has occurred.

    ------------------------------
    Nancy L. Gusman, Esq., CLTP, NTP
    GusmanLegal, LLC
    Beltsville, MD
    (301)563-9669
    ------------------------------

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  • 13.  RE: Creditor checks

    Posted 06-01-2022 01:57

    I agree with everything Nancy has said.  Just one point, be sure the account number is set forth on the check!  Debtor's name, too, is a help. 

    We have had situations where the payment stub was separated from our check in the credit card company's mail room.  Giving the payee as much information as possible right on the check will avoid problems.

     

    I hope everyone is enjoying this forum as much as I am.

     

    ___

    Stephen  M. Flatow

    Vested Land Services LLC

    165 Passaic Ave, Suite 101

    Fairfield, NJ 07004

    973-808-6130

    973-227-0645 Fax

    WARNING – FRAUDULENT WIRING INSTRUCTIONS
    Email hacking is on the rise to fraudulently misdirect funds. Before wiring us any money, always call our office to verbally verify our wiring instructions. Please use independent sources such as the internet, to verify our phone number. We will not be responsible for any wires sent to incorrect bank accounts.

     

     

     

     




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  • 14.  RE: Creditor checks

    Posted 05-31-2022 10:41
    I asked the question because I cannot imagine any circumstance in which I would entrust completion of a payoff required by the lender to any party other than myself as the closing attorney or the lender requiring said payoff.   My environment may be quite different from yours in that I only do commercial loan closings and I am in Georgia.  I agree with Nancy Gusman's comments that "we have responsibility to make sure funds are received by the creditor timely, per the loan instructions" and "you are increasing your liability with the lender" if you fail to do so.
    If the Lender's closing instructions list borrower loans that are to be paid with the new loan funds as a condition to closing, we do not close until we have the information necessary to render those payments directly.  If the new Lender wants to proceed and they will waive their requirement, we get that in writing and send the money for the payoff they have waived in accordance with their revised instructions.  This rarely happens. Usually we get the information needed and close on time, or perhaps a day or two later.

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    Darren Meadows
    Hull Barrett, PC
    Augusta GA
    +1 (706) 722-4481
    ------------------------------

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  • 15.  RE: Creditor checks

    Posted 06-01-2022 10:21
    Hi Rachel,

    As others have mentioned we too require the statements be provided in advance of the signing. In short, if we see additional debt being paid off in connection to ANY transaction (not just refi's, as we see additional debt being paid on purchases where lender needs the DTI lowered, sales where a Seller wants to pay something off with a portion of their proceeds, etc.), we immediately respond with a request for the actual 'statements' themselves...not just a credit report printout or the like, but rather the actual statement showing the appropriate mailing address, FULL account number (we ask for this in the event not shown on the statement, i.e. bunch of x's and only the last 4 digits), payee name, etc. In addition to this, we notify all parties involved, including the lender or broker, all prior to the actual closing that third-party payments can take up to 2-3 weeks to be processed by the creditor, and we are not responsible for any missed payments, late fees, etc., and that if the client is concerned they should make the minimum payment in the interim. In full disclosure though, after reading some of the other responses in this thread we may in fact add an additional acknowledgement form laying all of the above out and have the client to sign the same at closing.

    This really is an exorbitant task which used to be handled in the manner you mentioned you have been doing, but due to the same issues you are experiencing now most have opted to remit directly to ensure the payment is actually mailed in and checks do not go stale needing to be reissued multiple times over. We have been pretty successful via the above process and have not found a need to retain additional services from Sat-Tracking companies like Require.

    Wishing you all the best.


    ------------------------------
    Joshua Brauwerman
    Office Manager / Title Agent
    Trusted Title, Inc.
    Spring Hill FL
    +1 (352) 610-4302
    ------------------------------

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  • 16.  RE: Creditor checks

    Posted 06-01-2022 08:03
    These situations are the bane of my existence. In the very same week I had one borrower throwing a fit because we paid off the account and creditor closed it and they didn't want it closed. Another crying at me because the payment didn't get there fast enough to close the account without accruing more interest and a reconciliation statement showing an outstanding check from 3 weeks ago that never cleared because that check was given to the borrower to send in with their statement. 

    We've had too many problems giving checks to borrowers to send in with statements. They lose the checks. Lots of stop payments.
    We've had people made the account was closed. People mad the account wasn't closed. Lenders who want all accounts closed, other who just wanted it paid down.

    Here is our standard procedure:
    It the payment is not a title requirement, we will not put it on the CD unless the lender provides us with a statement. Their requirement, their responsibility.
    Lender must also complete a form specifying the accounts they want paid if it is a pay down, or pay and close.
    The payment always goes directly to the creditor - wire when possible, overnight if not, only mail when the only option is a PO Box.
    Debtor signs a letter that goes to the creditor that has huge bold words that say "close account" if that is what the lender indicated needed to happen.

    ------------------------------
    Cheryl Evans
    CEO
    Zen Abstract
    Perkasie PA
    +1 (267) 855-2021
    ------------------------------

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