Victories, Victims, Violations & Vendors

Dear Members,

This is a great time of year!  Cooling off a bit; football season (which is going well for some of us…..but not for others); baseball playoffs (Go Rays!); and how about that USA RYDER CUP TEAM!!!!    But despite these great distractions, the criminals are still after you so I have some info about protecting your clients and yourself.  I also have some reminders about overages in your trust account and a few more tidbits.

October is Cybersecurity Awareness Month and The Fund is again presenting a wealth of education on how you can protect yourselves and your client’s funds and private data.  Over the course of the month, we’ll be hosting free “Fund Town Halls” featuring discussions on how to avoid mortgage payoff fraud (a major problem!), what the insurance market can offer title agents, and we’ll hear from a Florida-based FBI agent handling business email compromise frauds of the type harming our industry. For more information on these webinars, please visit the Education tab on The Fund’s website. While there, also check out the Information Center and the content contained within Information Security, including our October Cyber “Tip of the Day” feature. My message to you all is simple: Don’t think you can’t be a victim of a cyber-crime. It’s real and we are hearing about it all the time at The Fund. Educate yourselves, your staff and your clients and stay alert!

Overages in trust/escrow account.  From time to time, I am sure you discover an overage in your trust or escrow account due to a miscalculation on a settlement statement.  Members have recently reported seeing or hearing about a "surplus funds disclosure" used by a title agent (or even an attorney), which provides for the parties to waive a refund of such funds when the sum is less than a certain amount (e.g., $25) and agree that the closing agent can just keep it.  Unfortunately for those seeking a simple solution, it runs afoul of Sec. 626.8473, F.S. and both The Florida Bar and Florida Department of Financial Services (DFS) condemn the practice.

Florida Bar Rule 5-1.1(b) states “(m)oney…entrusted to a lawyer for a specific purpose…must be applied only to that purpose” and “refusal to account for and deliver…on demand is conversion.”  Subparagraph (i) states “(t)rust funds…held for missing owners must be disposed of as provided in applicable Florida law after diligent search and inquiry fail to identify the…owner’s address.” (i.e., ch. 717, F.S.)

The DFS in its FAQs on Title Escrow Accounts says “(f)ailing to disburse any amount from the escrow fund is a violation of Sec. 626.8473,” that DFS “does not recognize any waiver of the provisions of the Florida Statutes that relate to funds held in escrow,” and “(a) title insurance agent or agency must immediately return any amounts that are due to the consumer, regardless of the amount.”

Vendor Marketplace Focus.  You know how essential a comprehensive lien search is to the closing process, so if you’re “searching” for those services, head to our Vendor Marketplace first to learn what Florida Municipal Lien Search, Property Debt Research, PropLogix, Quality Lien Services and Skyline Lien Search could offer your practice. Visit Vendor Marketplace, click the Lien Search category, and check out their Member specials too!

That's all for this week.  Let me know how we can help you.

Melissa Jay Murphy
Executive Vice President, Chief Legal Officer,
and General Counsel