Good Funds in North Carolina

Overview

Sources

Wet or Dry Settlement

Wet

Definition

Notwithstanding that a deposit made by a settlement agent to its trust or escrow account does not constitute collected funds, the settlement agent may cause a disbursement of settlement proceeds from its trust or escrow account in reliance on that deposit if the deposit is in one or more of the following forms: (1) A certified check; (2) A check issued by North Carolina, the United States, a political subdivision of North Carolina, or an agency or instrumentality of the United States, including an agricultural credit association; (3) A cashier's check, teller's check, or official bank check drawn on or issued by a financial institution insured by the FDIC or a comparable agency of the federal or state government; (4) A check drawn on the trust account of a licensed North Carolina attorney; (5) A check or checks drawn on the trust or escrow account of a licensed North Carolina real estate broker; (6) A personal or commercial check or checks in an aggregate amount not exceeding $5,000 per closing if the settlement agent making the deposit has reasonable and prudent grounds to believe that the deposit will be irrevocably credited to the settlement agent's trust or escrow account; (7) A check drawn on the account of or issued by a mortgage banker that has posted with the Commissioner of Banks a surety bond in the amount of at least $300K. The surety bond shall be in a form satisfactory to the Commissioner and shall run to the State for the benefit of any settlement agent with a claim against the licensee for a dishonored check. NC Gen. Stat. 45A-4(a).

Requirements

With regard to real estate transactions involving a one- to four-family residential dwelling or a lot restricted to residential use, a settlement agent shall not cause a disbursement of settlement proceeds unless those settlement proceeds are collected funds. NC Gen. Stat. 45A-4(a).

Exceptions to Requirements

N/A