Escrow Fraud and Trust Account Compliance

Key Takeaways

• Escrow compliance requires segregation, reconciliation, fidelity bonds, authorized signers, and regulatory examination.
• Warning signs of escrow problems: delayed disbursements, reluctance to confirm balances, high turnover, and financial distress indicators.
• Four investor protections: verify fidelity bonds, require ALTA certification, confirm underwriter standing, and diversify across title companies.
• Escrow fraud is catastrophic—prevention through due diligence is the only reliable protection.