Best Practices, Policies, & Procedures

 

College Escrow, Inc. is a member of the Escrow Institute and is licensed by the California Department of Business Oversight and adheres to the licensing requirements and operation requirements under Escrow Law. College Escrow, Inc. and its' employees strictly comply with the Escrow Institute Code of Ethics, proprietary Policies and Procedures for best practices in business, operations and real estate settlement practices.

 

Escrow Institute Code of Ethics

The Escrow Licensee is the entity that processes most real estate transactions, personal property and business transfers. It acknowledges that the responsibilities and obligations undertaken in escrows are of the utmost importance. Therefore, it maintains and improves the standards of its profession and shares with fellow practitioners a common concern for the integrity and fiduciary responsibility of the profession.
Licensed by the State of California, the word “Member” used in this code shall mean a Corporation accepted for membership by the Board of Directors of the Escrow Institute of California. Every Member pledges itself to observe the spirit of and conduct its business in accordance with the following Code of Ethics:

  • A Member shall maintain a professional level of knowledge as to current legislation and laws relative to or affecting escrows.
  • A Member shall maintain the confidential nature of all escrow transactions, shall relate the facts or materials relative to such transactions to entitled persons only, and otherwise shall require the issuance of an official document pursuant to the laws of the State of Jurisdiction.
  • A Member shall be timely and expeditious in the processing and closing of all escrow transactions.
  • A Member shall sustain its fiduciary responsibility to the principals in each transaction by remaining an unbiased and neutral third party.
  • A Member shall conduct its business without any corruption, dishonesty, fraud, misrepresentation, or unethical practice for the benefit of the profession and the protection of the public.
  • A Member shall not engage in activities that constitute the unauthorized practice of law and should never hesitate recommending that a principal seek appropriate counsel in connection with an escrow.
  • If an employer/employee, family, stockholder or director relationship exists between a principal to a transaction and a Member, it shall be disclosed to all principals immediately.
  • A Member shall conduct its profession in such a manner as to avoid controversies; shall never disparage the professional practice and/or knowledge, seek unprofessional advantage nor volunteer an opinion of the processing of a competitor’s transaction. If its opinion is sought, it should be rendered with strict professional integrity and courtesy.
  • A Member shall disclose to any client its lack of knowledge as to a given type of transaction and shall refer said client to at least two fellow Members who have professed to have knowledge of transactions in that field.
  • A Member shall acquire and maintain sufficient professional knowledge to process all transactions accepted.
  • A Member shall maintain fees in accordance with sound business practices by charging for services performed, liability imposed and shall not unfairly undercut the competition nor unfairly overcharge the public.
  • A Member shall endeavor to oversee that all employees maintain integrity, honesty, objectivity; are not taken unfair advantage of; and encourage employees to obtain education, thru schooling, seminars, and the membership in industry organizations available to them such as their local escrow association, California Escrow Association, etc.
  • A Member shall at all times abide by the Codes and Statutes of the State of California, as required under its License.

Department of Business Oversight Escrow Law

The following reports must be submitted by all Escrow licensees by the due date noted:

  • Audited Financial Statements, Due within 105 days of end of fiscal year
  • Each escrow agent must submit to the Commissioner an audit report containing audited financial statements covering the calendar year or fiscal year within 105 days after the close of the calendar or fiscal year. Additional relevant information is also required (California Financial Code Section 17406 and 1741.5 of the California Code of Regulations).
  • Report of Escrow Liability for each Licensed location, due February 15
  • Each escrow agent must file a Report of Escrow Liability for each licensed location no later than February 15 of each year (California Financial Code Section 17348).
  • All new officers, directors and employees must be reported within ten days of their employment.
  • Each escrow agent is required to notify the Department 30 days prior to a change in the address of the licensed location.
  • The closing audit is due within 105 days from the date of the application to surrender the license that was received by the Department (Financial Code Section 17600).

ASSESSMENTS

 

Annual Assessment:

  • On or before the 30th day of May every year, the Department will assess each licensee the costs and expenses reasonably incurred in the administration of the Escrow Law. The amount of the assessment is $2,800 for each licensed location. If the assessment is not sufficient to cover the costs and expenses of administering the Escrow Law, the Commissioner is authorized to seek a special assessment not exceeding $1,000 per location.

EAFC Assessments:

  • Each escrow agent that is required to be a member of EAFC will be subject to various assessments and must comply with the certificate program.

BOND REQUIREMENTS
Surety bond requirements

  • Each escrow agent is required to maintain a surety bond at all times. The amount of the surety bond may be $25,000, $35,000 or $50,000 depending on the average trust liability. The surety bond amount is increased by $5,000 for each additional licensed location.

Fidelity bond requirements

  • Each escrow agent that is not required to be a member of EAFC or processes transactions that are not covered by EAFC must maintain a fidelity bond at all times.
  • Corporate Securities of Escrow Agents
  • Each escrow agent must obtain prior consent from the Department for any stock transfer, issuance of new shares or cancellation of shares regardless of the percentage of the shares being transferred or issued to new or existing owner. In addition, to prevent unauthorized stock transfer, the escrow holder requirement is imposed on each escrow agent by the Commissioner as long as the escrow agent remains licensed under this Department.

LIQUID AND TANGIBLE NET WORTH REQUIREMENTS

  • Each escrow agent must maintain at all times liquid assets in excess of current liabilities of $25,000 and tangible assets in excess of total liabilities of $50,000. If branch offices are maintained by the escrow agent, they must increase tangible net worth by 50% of the requirement for the first branch office and 25% for each additional branch office.

BOOKS AND RECORDS

  • Each escrow agent is required to maintain its trust and general account books and records current at all times.

EXPERIENCE REQUIREMENT

  • An approved manager who has at least five years of qualifying experience must be at the licensed location at all times. An approved manager who has at least four years of qualifying experience must be at each licensed branch office at all times.

REGULATORY EXAMINATION

  • Each escrow agent is subject to a regulatory examination by the Department once every two to four years and the escrow agent is responsible for the cost of the regulatory examination.