Carteret Title
DRN Title Search
Register
Log In
Forget your Password?

Home
Directory
Bulletins
Forums
Blogs
Articles
Links
Classifieds
About Us
Contact Us
Advertise
FAQ
Privacy Policy


Source of Title Blog

Confirmed... The Ohio Good Funds Law is Harming Consumers
by Robert Franco | 2017/05/17 |

A few days ago I wrote a blog about wire fraud.  I commented that those responsible for the change in our good funds law were at least partially to blame for innocent consumers getting conned out of their life savings.  Well, yesterday a local ABC news station has confirmed that I was right.

Source of Title Blog ::

The headline reads "Perry Twp. homebuyers scammed out of $20,000 say new Ohio law made them vulnerable to wire fraud."  According to the article, the couple buying a home received an email that appeared to be from their Realtor instructing them to wire more than $20,000 to a bank in New York.  They went to their bank and wired the funds.  The next day, the title company closing their purchase called to look for their downpayment.  

 

 

This is a very sad story.  Hopefully, it will lead to a change in the good funds law to allow title companies to use their judgment on how to best ensure they have good funds for closings, while also protecting consumers from potential fraud.  

I'm just guessing, but this nice couple has probably never had to wire funds before. In all likelihood, they would have not have wired funds this time, but for an Ohio law that required it.  Had they brought a cashier's check to their closing, they would be decorating their new home today.  It is not a stretch to blame the Ohio Good Funds Law for this devastating loss.  

And, the title company could easily verify that a cashier's check is good by calling the issuing bank - particularly here where it would have been drawn on a local bank.   

The article says "the Akron Cleveland Association of Realtors told News 5 the Good Funds law was changed to protect consumers against bad checks in real estate transactions."  I do not believe it.  This law was meant to protect title companies, not consumers.  It actually places consumers in jeopardy. 




Rating: 

Categories: Crime, Ohio Legislation

426 words | 2092 views | 3 comments | log in or register to post a comment


there is no perfect solution...

Robert -  I am in agreement with you that there is no perfect solution for funds brought to closing.  

Issues -
Wires - wire fraud opportunity
Checks - fraudulent checks, lack of guaranteed funds without calling to confirm, possible fraudulent deposits via a remote capturing device, i.e. cell phone, take time to clear
Cash - added responsibility to the receiver, possible target for theft after obtaining/while transporting

Is there a perfect solution?   Not at all.  We are all victims to malicious use of technology as we have to safeguard against these fraudsters.

Where does the liability end?  

In this case, I resolve to find the realtor should have not been the one relaying wire instructions whereas it should have come to from the title company as their directive.   Any time an additional communication channel is in use, the opportunity knocks for issue. 

 
by Michael Solt | 2017/05/19 | log in or register to post a reply

No Perfect Solution - Common Sense and Education go a long way
I understand each jurisdiction has varying practices, but why would the real estate licensee be the one to advise the buyer when, where, to who and how closing funds are to be sent?  The title company in most jurisdictions handles the collection and disbursement of funds, except in escrow states like California, but then the escrow company and not the real estate agent should be the one giving instructions.  This is more an education problem to let consumers know how funds are to be delivered, the title company should let the consumer know when the file is first opened what to expect and surely should have something posted on their web site.  In our emails and on our wiring instructions, sent to the buyer, we advise them not to rely on the email or the written instructions without first calling our office to confirm the information is correct.   Too many of today's consumers are conditioned to responding to emails received without verification of the source of the email.  Education Education Education 
by Patrick Miller | 2017/05/22 | log in or register to post a reply

Duty to Inform
When the closing was set, the title company should have transmitted wire instructions on a company form showing the bank information and informing the customer to call the escrow officer to verify the wire amount and transfer information.   Wiring money should never be done on the basis of an email alone and it should not be done on a phone call alone.  Title companies never rely on payoff letters without calling the day of closing and having the figures verified before sending the payoff.  Buyers should also be informed not to rely on an email or phone call, but get the wire instructions in written form with a phone number to verify.  The wire system is much better than cashier checks, some title companies not located in 'good funds" states require a wire transfer because of the problem with counterfeit cashier checks.  
by James Newberry | 2017/05/22 | log in or register to post a reply
Source of Title Blog

Robert A. FrancoThe focus of this blog will be on sharing my thoughts and concerns related to the small title agents and abstractors. The industry has changed dramatically over the past ten years and I believe that we are just seeing the beginning. As the evolution continues, what will become of the many small independent title professionals who have long been the cornerstone of the industry?

Robert A. Franco
SOURCE OF TITLE

 

Links

Recommended Blogs Recommended Posts Source of Title Services
Recent Comments

I have done Richland and Lexington Counties many times and I agree.  My gripe is I have seen ou...
by Naomi Backes
You're a good man, my friend.  I have worked for many lawyers in the past and it is too easy to...
by Alix Ott
I concur with the general sentiment that the advancement in information technology will likely make ...
by Don (Chunshen) Li
Posting from personal experience... The title company I work for has had 2 instances within th...
by Richard Palen
A couple of thoughts about this.  Massachusetts has had computerized indexing since the 1980's ...
by Leigh Attridge
I like the idea of GIMP as well as the new program in Tennessee.  I can definitely see the oppo...
by Laura Johnston
When the closing was set, the title company should have transmitted wire instructions on a company f...
by James Newberry
I understand each jurisdiction has varying practices, but why would the real estate licensee be the ...
by Patrick Miller
Categories

 
© 2007, Source of Title.