Recently one of my buyers had a little difficulty meeting the closing deadline. He was all set to close. He had signed the closing documents on Friday. Closing was set for Monday. We did the final walkthrough inspection on Saturday.
Monday morning, he ordered his closing wire through his online bank, one of those with no brick and mortar building. At noon the title company contacted him and asked about his wire. He had assumed that it was in transfer, but the title company told him that there was no record of it. Title copied me in an email asking him for his Fed Reference Number.
When there was no email response from him, I decided to call. This is when he told me that the bank had placed a 10-day hold on his wire because there was a recent deposit that had not been verified. Evidently, his mother had gifted him a small portion of the wire amount, just a day or two before the closing. The bank did not know it was from his mother, but thought it was from some questionable source, thus the hold.
As it turned out, he lined up funds from another family member and had another wire to the title company using the same numbers they had given him. All kinds of questions came out of that attempt to correct the situation. In the meantime, my buyer got things worked out with his bank for the original wire, and he emailed the Fed number to the title agent. The second wire from was returned, and we were able to close the day after intended with the first one.
Two interesting side notes to this story…
When I went to my bank with the title company’s check for my commission, my bank had a new employee. He was working unsupervised, so he had to tell me that federal regulations required him to hold this check for 10 days. After some discussion and time for his supervisor to return from a meeting, they cleared the hold. I had banked there for fifteen years and made lots of deposits like this, so it was ok.
In another incident, one of my wife’s friends did have a check that she received placed on hold for ten days by their bank, without successfully getting around that hold.
Evidently the banks are really getting targeted with lots of fraudulent deposits in the form of checks from unknown sources. Duplication of cashiers checks is common. Wire fraud is very common also. The banks are exercising reasonable caution.
So, before closing date arrives, make sure you buyers have their funds available for their closing. Title companies like cashiers checks. So do I, as long as the bank doesn’t hang on to them.