2. ESCROW ACCOUNT CONTROLS
Adopt and maintain appropriate written procedures and controls for Escrow Trust Accounts allowing for electronic verification of reconciliation.
Purpose: Appropriate and effective escrow controls and staff training help title and settlement Companies meet federal, state, and contractual requirements for the safeguarding of funds. These procedures ensure accuracy and minimize the risk of the loss of funds. Loss of funds may not be covered by the Title Agency’s Errors and Omissions (“E&O”) insurance or the contract with its Title Insurer. Such losses would then become the responsibility of the Title Agency. Settlement companies may engage outside contractors to conduct Escrow Trust Accounting duties.