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What is Sub-Escrow?

Sub Escrow is a service provided by the title company which assures the buyer, seller, and lender that the loans / mortgages / liens of record have been paid off through escrow and properly released.

It is the title company's responsibility to physically payoff any loans against your house while you are refinancing or selling your property. The title company arranges for the new lenders loan proceeds and loan documents to be picked up before escrow closes. The new loan funds are used to payoff the loans of record at the
close of escrow.

The sub escrow fee charged by the title company is required by the department of insurance. Because of this requirement, the fee charged is generally a break even charge to simply reimburse the title company for the labor involved in calculating the loan payoff, and other necessary tasks within the payoff process.

Timeline of Key Events in basic Payoff Procedures

1. PAYOFF CALCULATIONS
• Open payoff in computer
• Scrutinize demands for calculations
• Verify figures and update figures if necessary
• Post demands into computer (We need updated written demands which includes
any last payments, expired mortgage payments, etc.)

2. PROCESSING THE PAYOFF
• Verify good and sufficient funds are received and deposited
• Finalize closing calculations.
• Provide escrows with final payoff figures.
• Assist escrow customers with questions about payoff calculations, disbursing
methods, charges, etc.

3. DISBURSING THE PAYOFF
• Verify recording is confirmed
• Sort checks for delivery via Federal Express, Cal overnight, messenger, tax checks,
wires for payoffs or taxes.

4. FINALIZING THE PAYOFF TRANSACTION
• Verify all disbursements are completed.
• Balance file after title fees are swept.

For more information, contact your Gateway Title representative.