EDUCATIONAL:  Nevada Mortgage Escrow and Title Specifics

 

In Title Insurance, What is a Mortgage Escrow?


A mortgage escrow is an arrangement of which a neutral third party (a title company and its employees). Escrow holds legal documentation and funds on behalf of a buyer and seller. The escrow officer works closely with you, your realtor and lender to assure that the sale conditions are complied within the time period called for in the Purchase Agreement. Escrow is bound by law to notify both parties if the instructions given are not mutually consistent or cannot be carried out. These instructions are drawn by the Escrow Officer, and signed by the buyer and seller.


What is an Mortgage Escrow Account?                                      

An escrow account is a fund that your Lender establishes in order to pay property taxes and hazard insurance as they  become due on your home during the year for the duration of the loan. In this way, the lender uses the escrow account to guard its investment in your home. 

 

How Do I Open an Escrow?
 

If the property is within the State of Nevada, FAX us our Escrow Open Order Request Form and a Purchase Agreement  24 hours a day, 7 days a week for any property within the State of Nevada. We will immediately open your escrow that same day or if your FAXed order is received after business hours or on a weekend, escrow will be opened the next business day, first thing in the morning. We regularly check our email, voice messages and FAX machine throughout the business day to provide the best customer service possible. 24/7 Faxes are encouraged or contact us.

 

What is an Escrow Officer?

An escrow officer (title agent, closing agent or attorney in some states), is one who has, through experience and education, gained a certain degree of expertise in escrow matters. An escrow officer is licensed by that State's Division of Insurance to execute escrow's on any property within any city and county of state in which that person performs business and the property resides in. They are to be a neutral 3rd party. They cannot give legal advice.                                                       See: Escrow Officers Duties and Responsibilities.

 

Who Chooses the Escrow Officer?

The escrow agent is someone that can be an impartial third party and usually works for the title company involved. Laws about choosing an escrow agent are different from state to state. Sometimes the buyer decides and sometimes it’s the seller who chooses whom it will be. This decision should be made early in the buying process as the money should be put up immediately.

 

How Do I Choose an Escrow Officer?

If it’s your choice as to whom will act as the escrow officer / title agent, you can basically choose whomever you want. If a real estate broker is involved in the transaction, the broker may recommend a title company or escrow officer. It is the right of the principals to use an escrow officer who is competent and who is experienced in handling the type of escrow at hand. However, the officer should be someone reliable enough to be in charge of the money in the escrow account and the ability to get the escrow closed on time. The quality of the escrow officer work is a direct  reflection of the title company's standards and ethics. 

 

Why Do I Need an Mortgage Escrow?


Whether you are the buyer, seller, lender or borrower, you want the assurance that no funds or property will change hands until ALL of the instructions in the transaction have been followed. The title company and the escrow officer have the obligation to safeguard the funds and/or documents while they are in the possession of the escrow officer, and to disburse funds and/or convey title only when all provisions of the escrow have been met. For additional information, See What the Customer should know.

 

What Can Delay Close of Escrow?

I will list some of them and not in any sentence structure. Any of the following could delay, slow down or jeopardize the sale: A "lis pendens" or a notice that a lawsuit is pending, an unknown right-of-way, a utility easement, an unknown "lis pendens" (lawsuit is pending notice) or judgment against the Seller, delinquent taxes, assessment bonds or tax liens, judgments, readiness of the Seller, Buyer or the Buyers Lender taking to much time to fund due to Loan Officer & Lender communications.  NOTE: The Escrow and/or Title company or its officers cannot force a lender to fund on a loan.

 

When Will the Escrow Close?

On the date mutually agreed upon by Buyer and Seller in the purchase agreement unless there is some other unforeseen delay. I have had cash deals close in 7 days and escrows requiring funding, take anywhere from 14 to 60 even as long as 90 days depending on the readiness of the Seller, Buyer or buyers loan officer. 


 

Can I Cancel an Escrow?


A Purchase Agreement is a legal and binding contract. One can submit (in writing) that you want to cancel the escrow if a Buyer shows that they can not qualify for their loan (Lender must put this in writing and submit it to escrow) the Buyer can have their earnest money (deposits) returned and walk away from the home purchase and the seller can not keep it. The appraisal doesn't meet the asking price or the inspections fail. On the other hand, if the Seller puts a "Kick-out Clause" in a sales contract, that allows a Seller to accept one buyer's contingent offer, then back out without penalty if a second buyer makes a better offer. In short, if you don't really want it, don't sign it.

 

What is the Mortgage Escrow Process?


The principals to the escrow – buyer, seller, lender, Realtor – cause escrow instructions, always usually in writing, to be created, signed and delivered to the escrow officer. If a broker is involved, they will normally provide the escrow officer with the information necessary for the preparation of your escrow instructions and documents. The escrow officer will process the escrow, in accordance with the escrow instructions, and when all conditions required in the escrow can be met or achieved, the escrow will be "closed." Each escrow, although following a similar pattern, will be different in some respects, as it deals with your property and the current transaction. The duties of a title company include; following the instructions given by the principals and parties to the transaction in a timely manner; handling the funds and/or documents in accordance with the instruction; paying all bills as authorized; responding to authorized requests from the principals; the escrow officer closing the escrow only when all terms, funds in accordance with instructions and provide an accounting for same – the Closing Statement