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With the new year upon us, the “Good Funds” section of the Title Insurance Act is now one full year old. Illinois home buyers (and the professionals that represent them) are the beneficiaries of a bit of a "birthday present" from our friends down in Springfield - an amendment that addresses the three biggest issues that were complicating closings over the last 12 months. The good funds rule regulates the way anyone bringing money to a closing can deliver it to the closing agent. Basically, funds in excess of $50,000 must be sent by wire transfer. Funds less than $50,000 can be delivered by wire or cashiers, certified, or (approved) title company check. 

As amended, 

•        Earnest money held by a real estate broker or attorney is no longer aggregated with the buyer’s bottom line. As long as those funds are less than $50,000, title companies can now accept a realtor's or attorney's check drawn on a trust account. Note: this is not a slam dunk - the title company must has reasonable grounds to believe that sufficient funds are available for withdrawal from the account - so there is some measure of discretion here.

•        A purchaser wired funds of $50,000 or more, but comes up short due to a last minute change in the closing figures may now be able to bring in a supplemental cashier’s check or other “non-wired funds” to closing to cover the difference, again, subject to the title company's personal check limits.

•        purchasers, sellers, and lender are all considered "single parties" to the transaction, regardless of the number of purchasers, sellers, or lenders involved in a transaction, in other words, two buyers cannot each each bring a $50,000 cashiers check. Their aggregate $100,000 would need to be wired in to the title company.

A good many closings last year were delayed as buyers (and sellers) failed to appreciate the strict compliance that the original rules demanded. I know a great many real estate offices were having trouble getting earnest money wired to title companies and most were grousing about the bank charges assessed when wiring. Buyers who were wiring in "exact" bottom line amounts were also being frustrated by last minute changes in the numbers that required $10 or $20 supplemental wires.  The revisions should make their closings a whole lot easier. 

NOW, if we could only legislate a way to get the banks to timely wire their funds to our closings.....


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