Did you Know… that Banks are Experiencing Wire Room Delays as a Result of COVID-19?
March 27, 2020
As you may know, any funds required for a real estate transaction must be “good funds,” meaning that the funds must be deposited in the settlement company’s escrow account at the time of closing and immediately available for disbursement after settlement is complete.
Recently, we have received reports of wire room delays from all banks. Under normal conditions, wires can be processed and received within the hour; however, as a result of COVID-19, we are now seeing delays of at least 4-6 hours. It is our understanding that these delays are due to the fact that banks may be working with a reduced staff, and employees may be working remotely. Practically speaking, this means that anyone who needs to bring funds to settlement (typically, buyers and borrowers) should take the potential delay into account, and plan to send out their wires further in advance of closing. Moreover, they should call their bank to inform the bank that the funds are for a real estate closing, and to request prioritization of the wire. Again, the requirement to deliver “good funds” means that the funds must be received in the settlement company’s escrow account at the time of closing, so that the funds can be disbursed immediately after the settlement is complete.
Sellers may also experience a delay in receiving funds wired by the settlement company. If sellers are using the sales proceeds from the sale of their current home towards the purchase of a new home, they should take this potential delay into account when scheduling the closing for their purchase transaction to allow sufficient time for wire processing. They should also give advance notice to the settlement company handling their sale so that the wire for the sales proceeds can be prioritized.
This publication is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances without first consulting a lawyer.