Six Steps to Enhancing Escrow Security

September 4, 2014

RynohLive recently released a whitepaper titled “Six Steps to Total Escrow Security” that offers guidance on safeguarding escrow accounts.

In the whitepaper, RynohLive explains that by following some simple escrow accounting best practices and harnessing today's technology, companies can enhance the protection of client funds and safeguard their business from theft. The whitepaper presents six steps that include an explanation of why these specific best practices are critical, as well as answers to common questions and expert insight on fact-based scenarios.

“One of the main areas of risk for the title insurance industry right now is escrow accounts,” said Dick Reass, president and founder of RynohLive. “Escrow security is absolutely crucial. Taking the correct precautions can mitigate your risk substantially.”

Regulatory bulletins contained guidance that placed the responsibility for the qualification, monitoring, and oversight of third-party vendors with lenders. Now, underwriters and title agencies need to quickly demonstrate that they have established proper and reliable controls to protect settlement funds, according to RynohLive.

The six steps discussed in the whitepaper include:

  • Daily three-way reconciliation of escrow trust accounts
  • Electronic verification of reconciliation
  • Use of Positive Pay
  • Daily tracking of disbursements
  • Establishing strong cyber fraud protection
  • Creating automated reports for underwriters

“Escrow security is just as much about finding/fixing the everyday errors as it is about protecting your agency from cyber-attack, fraud, and embezzlement of settlement funds,” the whitepaper states.

ALTA’s “Title Insurance and Settlement Company Best Practices” provides guidance on policies and procedures that should be developed and documented regarding escrow trust accounts.

Immediate action and change is necessary to protect the industry structure from risk.  Title agents need to update their systems and adapt their businesses to ensure that lenders and regulators do not cut them out of the disbursement end of the transaction altogether.


Contact ALTA at 202-296-3671 or [email protected].