June 2010

Careful. Attorneys Are Liable For Their Bookkeepers’ Mistakes!

The Bristol Herald Courier, a TriCities newspaper, serving Virginia and Tennessee just reported that a local attorney was formally reprimanded for the actions of his bookkeeper.

We have all heard the stories about attorneys who were subject to disciplinary action or disbarred for unintentional trust account management errors or borrowing trust account funds. Often attorneys have bookkeepers handle their escrow and trust accounts out of fear of making inadvertent errors. We even know another attorney who turned down the opportunity to take over a successful small firm because their escrow account ledger was written in pencil!

Virginia attorney Charles Jessee, Jr., mentioned in the TriCities newspaper, took over his father’s firm. His father had hired Anna Howell in 2007 to give her a new start. You see, she had pleaded guilty to embezzlement, but Mr. Jessee, Jr. did not know this. Howell secretly redirected the firm’s real estate escrow account checks by issuing stop payment orders, and then reissuing them as money orders which she used to pay off her own debts. When she was caught, Mr. Jessee, Jr. was reprimanded even though he had no idea what Howell was doing or that she had a criminal background.

While Easy Trust offers a solution that can help attorneys avoid the possibility of making unintentional mistakes with their escrow or trust accounts, lawyers will always have to be extra vigilant because any trust bookkeeping mistake can have severe consequences.

Check out our newly published summary article about how Easy Trust enhances compliance.

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New VA Loan Origination Charge Itemization – Whose Job is it?

Real estate attorneys and settlement agents have had nearly six months to get used to the 2010 Real Estate Settlement and Procedures Act (“RESPA”) rule. And now, there are more changes, if you are dealing with VA guaranteed home loans. As of May 1, 2010, the Department of Veterans Affairs (VA) issued new loan documentation requirements for lenders in response to the RESPA Rule.

VA Circular 26-10-01 specifies that lenders must either itemize their VA loan origination and other fees on the empty 800 lines to the left of the column in the HUD-1 statement or, if the information does not fit in the space provided, the lender must prepare a separate “Origination Statement.”

Although the VA Circular indicates that lenders are to prepare the Origination Statement, we’ve learned from conversations with customers that many lenders are asking settlement agents to prepare the form themselves.

Easy Soft to the Rescue!

Even if you find that a lender expects you to prepare VA loan closing itemization and origination statements, our real estate closing software, Easy HUD has got you covered.

For more information on the new VA guaranteed loan requirements, click here.

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